The National Electric Power Authority/Power Holding Company of Nigeria (NEPA/PHCN) was privatised on Friday 1st November, 2013 when the Federal Government handed over its assets and eighteen generation, transmission and distribution successor companies to the “core investors” (privileged and wealthy Nigerians) who bought them. I do not know whether the liabilities thereof were equally privatised or written off.
The Minister of Power, Prof. Chinedu Nebo, and the National Electricity Regulatory Commission (NERC) were optimistic on how the privatisation will bring positive changes to the electricity sector. They promised that the new owners will deliver steady power supply in the country, and threatened to sanction any investor who defaulted in delivering on the performance agreement they executed with the government. I do not share in their optimism. I fear that electricity supply may never improve in Nigeria, even with the euphoric privatisation. So far, it has not changed from its usual, notorious epileptic nature. It was rumoured that the just-concluded centenary celebrations were powered by a stand-by generator, to avoid embarrassing power failure!
NEPA/PHCN officials devised many schemes with which they extorted money from Nigerians and frustrated steady power supply in Nigeria. The first is the fixed meter charge, called “meter maintenance charge” under the era of post-paid meters. It is a constant that is unaffected by the quantum of power consumed. Another was the arbitrarily-imposed estimated bills; NEPA/PHCN officials either refused to read meters and use the readings for billing or deliberately rendered the meters non-functional. They applied threats of disconnection to arm-twist Nigerians into paying for electricity not consumed. In repeated instances, electricity bills were issued to and enforced on Nigerians for periods when they had no functional transformers!
With the introduction of prepaid meters, Nigerians heaved sighs of relief, hoping that NEPA/PHCN would supply reliable electricity to consumers. The hope was anchored on the belief that by a prepaid meter (pay-as-you-go system), the billing system will truly reflect the quantum of electricity consumed. Indeed, power supply improved tremendously in the early days of prepaid meters to the extent of almost 24 hours electricity supply, leaving Nigerians surprised. Perhaps, as one NEPA/PHCN official said, this was meant to ensure the quick exhaustion of the amounts standing to the credit of consumers so that they recharge their meters often!
For a fact, NEPA/PHCN staff opposed the introduction of prepaid meters. Against this background, one expected the government to ensure that the billing system of the prepaid meters was followed to the letter. Unfortunately, the government introduced the Multi-Year-Tariff-Order (MYTO) in 2008 under which electricity tariff was to be increased yearly. The authorities claimed this was necessary to attract “investors” who reportedly considered the tariff regime in the sector unattractive and unlikely to ensure good return on their yet-to-be-made investments!
Thereafter, Nigerians noticed a hike in the fixed meter charge, and this has remained a periodic feature of the prepaid meter! It now stands at a minimum of N750 monthly per meter in a residential building! Initially, NERC denounced its retention, only to do a volte-face by justifying same, claiming that it was not “meter maintenance charge” but the instalmental repayment of the cost of prepaid meters! Interestingly, except for the small-size prepaid meters provided by the World Bank and installed by its consultants free of charge, Nigerians paid around N50,000 for each prepaid meter provided and installed by NEPA/PHCN! So, which “cost” is being repaid? Assuming some persons did not pay for the NEPA/PHCN prepaid meters, should the repayment apply to every Nigerian? Recently, NERC came up with another reason, claiming that the proceeds of the fixed meter charges were for the repair and maintenance of spoilt NEPA/PHCN facilities! Is it justified for poor Nigerians to pay for that? Were the liabilities of NEPA/PHCN not bought by the “core investors”? If not, is there no budgetary provision for their repair and maintenance?
Immediately the fixed meter charge was introduced into the prepaid meters, electricity supply relapsed to its usual, notorious epileptic nature. Thus, Nigerians are still forced by official fiat to pay for electricity not consumed. To worsen matters, by the MYTO, this fixed meter charge will be reviewed upwards periodically. All these form part of the legacy bequeathed to the “core investors”.
I ponder over the sort of regulation NERC carries out in the electricity industry. Like the Petroleum Products Regulatory Authority (PPRA) for the petroleum industry, NERC seems to stand for the recommendation, implementation and defence of periodic hikes in electricity tariff, in the face of continuing dwindling power supply! But a regulator protects citizens by regulating charges imposed by operators.
For long, the government has been unable to sanction NEPA/PHCN officials for non-performance. Again, the body’s enabling law made it impossible for aggrieved consumers to seek legal redress against it. Against this background, one does not see how the government will be able to sanction any of the investors should they tow (which I am sure they will) the ignoble path charted by NEPA/PHCN. How effective has the regulation of Nigeria’s mobile telephone providers (whose tariffs are the highest in Africa) been? What is more, the foundation (if not the main) staff strength of these “core investors” are drawn from NEPA/PHCN staff.
Guided by the way previous “core investors” have managed other privatized public companies in Nigeria, I doubt if the latest “core investors” will turn around our electricity sector. It is going to be business as usual. Surprisingly, the Ministry of Power and NERC failed to make rules and regulations to guide the core investors’ operations prior to the handover! Surely, the operators will have a field day and, any such rules and regulations, whenever made, will be on their terms.
I foresee the “core investors” forming a cartel to continue from where NEPA/PHCN stopped in the rip-off of Nigerians, while rendering abysmal services. This is already happening in Nigeria’s mobile telephone sector. A lifting of the corporate veil of the “core investors” may reveal that they are owned directly or indirectly by persons who oversaw NEPA/PHCN’s recurring malfunction over the years. Some of the “core investors” may own generator-importing companies in Nigeria which connive with NEPA/PHCN officials to ensure epileptic electricity supply, to boost their sales. This calibre of persons or companies can never move the electricity sector forward!
Is it true that the government plans to still remove “subsidy” on electricity tariff? Yet, part of the reasons advanced for the MYTO and the hike in tariff is the removal of the purported subsidy. So, what other “subsidy” is there to be removed? Is the government bent on ensuring huge returns on investments for the “core investors” at all costs, and at the expense of hapless Nigerians?
For so long as the fixed meter charge and MYTO remain, Nigerians should not expect any improvement in the electricity sector, despite the seeming change of guards. Such charges ensure that electricity suppliers always smile to the banks, whether or not electricity is supplied. Imagine the aggregate of N750 monthly per house in Nigeria! If the government is committed to sanitizing the electricity sector, it must remove the charge and others like it from the electricity meter. Let this roguery and rip-off stop, for Nigerians to pay electricity bills as per the quantum of electricity consumed.