Why DisCos stall on smart billing scheme

• …victims of corporate deceits, intrigues  

UNMETERED electricity consumers have never had it this bad. In the past two months, some consumers, especially in Lagos, have received as much as N100,000 plus as monthly consumption charges. Despite irritating complaints and media ‘dragging’, the “crazy bills” continue to increase month-on-month.

The electricity distribution companies (DisCos) who the new operating model has saddled with the responsibility of managing the downstream issues, including billing and consumer interface, often blame their inability to meter their customers on poor capacity, inefficient bureaucracy and logistics.

Individuals and groups, including community development associations (CDAs), have taken different DisCos to the cleaners over what they have described as extortionist charges. A few communities have even called on the management of affected DisCos to disconnect them as they cannot continue to pay for services not rendered.

The industry has experimented with different metering programmes but with insignificant successes. A few years back, it gambled with the Meter Asset Provider (MAP), a programme expected to lead a digitally mass rollout on the units to drastically reduce unmetered consumers. But statistics by the Nigerian Electricity Regulatory Commission (NERC) only show the mess DisCos have made out of the programme.

From 2019 to 2020, the 11 DisCos were to give out 6,588,971 to consumers who were sensitised to leverage digital application and tracking to procure smart metering units. Sadly, the power distribution firms could only deliver 508,812 or 7.7 per cent of the target as of November 2020. 

Ikeja Electric, a DisCo that is constantly in the news over disputed consumption, has a contracted unit of 1,074,411, the highest in the industry. The company could only meter 15.4 per cent (165,081) of its target. Ibadan DisCo, coming behind Ikeja, was to deliver 988,915 units. At the NERC assessment, the DisCo metered only 3.8 per cent of the figure. 

Abuja Disco came second in terms of expectation with a unit target of 900,000. But as in the case of Ikeja, it delivered only 16.7 per cent of the target as of October. It goes thus shabbily for most of the DisCos with an average performance falling below eight per cent. Yola DisCo stood out completely. As of November, MAP aimed at metering 664 consumers, had not kicked off yet.

The Ministry of Power had announced last year that it would distribute six million meters under the three-month National Mass Metering Programme (NMMP) that commenced last November. A NERC document, interestingly, showed that only 1,000,001 had been released to DisCos for deployment as of the end of the take-off month (November). 

Still, only 11 DisCos started the distribution of the units meant for free installation. Those who are yet to take off are Benin, Enugu, Ibadan and Yola. With the 1.6 deployment rate of the available units, the 16,308 metered customers as of November made a mockery of the intended mass installation programme. 

In two years, the total number of meters deployed by the 11 DisCos was 525,120, which is merely 7.5 per cent of the 7.6 million contracted supply units. The figures imply that each DisCo installed an average of 23,869 yearly or 1,989 monthly.

Ikeja topped the list of installation with 165,105. Yet, it barely covered 15 per cent of its 1.07 million contracted units. Port Harcourt topped the list of best performing DisCo in terms of percentage delivery, which stood at 20.4 per cent in November. Sadly for customers under Yola DisCo, no smart meter was installed from 2019 to 2020, suggesting that the number of discretionary-charged consumers would have grown since new households would have been connected in the period. 

Meanwhile, authorities have continued to dither on the required reforms to bring the power efficiency up to par with the accelerated growth the recessed economy (whose the United States Agency for International Development (USAID) says is “constrained” by poor supply) deserves.

“Nigeria is endowed with large oil, gas, hydro and solar resource, and it already has the potential to generate 12,522 megawatts (MW) of electric power from existing plants, but most days is only able to generate around 4,000 MW, which is insufficient,” USAID pointed out in its review of the market.

According to information sourced from different research organisation, a large portion of the country’s population still does not have access to power. USAID puts the number “households without power” at 20 million. On the flip side, the power generating companies (GenCos) and distribution companies (DisCos) are burdened by unsustainable revenue mobilization.

For instance, out of the N61.3 billion the 25 GenCos invoiced for their services in September 2020 (the most recent available data), only N23.7 billion (translating to 38.7 per cent) payment was received. And September was the best month for the generating companies in terms of revenue mobilization in the year. Most of the months, its revenues profile was between 19 and 21 per cent with March taking the back seat with a revenue mobilisation of 11 per cent.

The situation is not better for DisCos as the all-important power sector continues to dither. Available data on Nigerian Bulk Electricity Trading PLC (NBET) shows that the 11 DisCos’ total invoice from January to September last year was N538 billion. 

At the close of September, only 128 million payments were made. The payment value is 24 per cent of the invoiced value. September’s payment stood at 51 per cent to lead other months by a wide margin. The payment percentage for March was 12 per cent, making it the worst-performing month.

The tattered cash flow of the partially-privatised power sector is rooted in trust issues. Consumers do not trust DisCo’ invoices which reflect the right amount of energy they consume. This affects the willingness to pay for even what is consumed, frustrating the ability of DisCos to pay for the energy purchased. In turn, GenCos do trust DisCos’ off-taking capacity. 

There is also the claim that the Transmission Company of Nigeria (TCN), which the Federal Government has blatantly refused to handoff, does not have the sufficient capacity to transmit the total generated energy, whose total capacity is put at about 12,000 MW. If TCN eventually builds capacity, DisCos also have much to battle in terms of replacing weak cables, faulty transfers and other obsolete facilities to seamlessly take the transmitted energy to Nigerians’ homes to encourage them to pay. 

So, the Nigerian weak power chain continues into another year of buck-passing.