Mr Eket Eko Ogbonga is the National Secretary of the Network for Electricity Consumer Advocacy of Nigeria.
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In this interview, Ogbonga speaks on the controversial subsidy removal through an increase in the tariff paid by consumers in Band A who, the Nigerian Electricity Regulatory Commission (NERC) says, are consuming 20 hours of electricity and above daily from N68/KWh to N225KWh, saying less than five per cent of those in the Band get 20 hours supply. He also speaks on the metering problem and how Distribution Companies (DISCOs) are smartly collecting money for electricity not supplied. Excerpts:
What kind of advocacy has been going on since the announcement of the tariff increase for Band A electricity consumers last week?
What are we going to tell Nigerians when the government has already made up its mind? Before this time, we saw it coming and we warned against the implication it’s going to have on the economy and Nigerians. We are not so much against tariff increases, the problem we have is that we have a Commission that is always churning out regulations but with no capacity to monitor implementation.
You said NERC cannot ensure compliance. How?
I deal with facts. In 2020-21, the Commission came up with what it called a Service-Based Tariff based on the principle that the more electricity that is supplied to your business or household the more you pay. Now this led to the reclassification of electricity consumers’ tariff bands. We have band A: The consumers there would be supplied a minimum of 20 hours a day to pay at that rate; Band B 18 hours, Band C 12 hours, Band D 8 hours, and Band E 4 hours. We surveyed Band A customers and we discovered that less than 5 per cent of those in that Band received 20 hours. We discovered that some customers in 11 months never had 18 hours of electricity supply but they are on Band A.
How do you measure?
We have meters and the prepaid meters are smart. If you have 50 outages in a day, the meter records it. So you can extract that information. So there is software you can use to get that information without tampering with the meters. Why do you think the DISCOs revenues are rising? It is because they are collecting money from Nigerians for power not supplied. So, we have a situation where some hoteliers on Band A never had an 18-hour supply for 11 months.
So, why do you think the DISCOs revenues are rising under the Multi Year Tariff Order, MYTO? Section 19 of MYTO and Sections 13 and 14 of the MYTO 2023, 2024 state clearly that where there’s failure on the part of the Distribution Company to deliver on the committed service level of 20 hours minimum for Band A, 16 hours minimum for Band B, 12 hours for Band C, there shall be retroactive adjustment of customers in those clusters and compensated. But there is no condition on how to measure. Was it going to be the DISCO that would measure, was it the Commission or the customer? So when we made noise about it, they came out with a regulation on compensation.
Nothing is said about how we will measure; you left it to the DISCOs and not the consumers. Will the DISCOs now say “We did not supply electricity to you; we are going to compensate you?” Haba! The question is how do you measure it? Is there a mechanism put in place by the Commission on how they can measure? They are talking about going to feeders. Do consumers know what feeders are? Do consumers have access to the feeders? So, these are the problems we are having.
Moving forward, what do we need to insist on?
Tariff increase, whether you call it cost reflective tariff, is not the silver bullet that is needed in the market. Why tariff increase or a reflection of cost in the market? We are dancing around the problem and our priorities have not been set right. First, what is the percentage of customers in Band A that are metered? We have a huge metering gap. The meter is the revenue assurance tool in the business of electricity. Why do we have revenue shortfalls, huge subsidies they are talking about? Aggregate, technical and commercial losses are as high as 47 to 49 per cent. This means that for every N100 of electricity generated, transmitted and distributed, you are losing N47 to N49 and you are recovering the balance.
Let’s look at the situation in Zambia, Kenya and South Africa. In Zambia for instance, to guarantee revenue in the electricity sector, the meter is paramount. If you meter 100 per cent as it is done in Zambia, their ATC and C is 17 per cent. The solution to the liquidity in the market is the huge metering gap of over 7 million of unmetered customers which now leads to the inability of the Distribution Company to collect revenue. You are not guaranteed your revenue. I bought energy three days ago for N50, 000 for services not yet used.
So, if you meter 100 per cent like is done in Zambia and Kenya, it will reduce revenue loss and shoot up your revenue collection. So, you cannot generate until distribution launches higher than generation to continue running around. In other words, until you can guarantee that what you generate you can distribute and get your money, we are not going to get there. And what will help you do that is the meter.
But there are claims that electricity supplied in any of the Bands can be measured…
If they claim so, let them provide the evidence because we are dealing with their document. The MYTO that threw up Service Based Tariff, Section 19 of the 2020 or 2021 and Sections 13 and 14 of MYTO 2023 state clearly that where there is a failure on the part of the electricity company to deliver up to a certain level, and upon confirmation by who is not stated and it says if it comes to NERC, and NERC verifies it, then NERC will order for a retroactive adjustment and compensation. They should mention one customer in the whole of Nigeria in 2022, 2023 and 2024 that they have measured its supply and asked for compensation. Would you beat your chest that you get 20 hours of electricity supply daily? The real thing is that Nigerians are not being supplied electricity based on the committed service level.
But is it a surprise to you that the Federal Government wants to save N1.14 trillion in electricity subsidies?
Why should it be if we are ready to do the needful and if the Distribution Company can distribute electricity? We have what they call MYTO Daily Load Allocation, is it all the Distribution Companies that are getting their daily load allocation? No. this is because they cannot take the product to consumers.
It is not about no money in the market, it is because of the environment that is created where those who are saddled with the responsibilities are only rent collectors. The same MYTO established what is called Performance Improvement CAPEX in 2021, and huge sums of money were allocated, I challenged NERC to publish how the money was spent by DISCOs.
What exactly is your grouse with the project?
Sometime in November 2022, some people and I were invited to the World Bank, and we were told that the Federal Government was asking for additional funding of $3 billion for the power sector and they told us about $9 billion that was already spent.
Who is tracking that money and where has the money gone? What impact has it made in the sector? The problem in our electricity sector is not what these guys want Nigerians to believe. The problem is the ability to tell Nigerians the truth about what is going on in the sector.
What should we do if we are going to have a grant or a loan of $3billion and you pump this money to raise the metering level to at least 80 to 85 per cent, the liquidity prices will drop sharply and the Federal Government would not be wasting that amount of money.
