′DISCOS say they get 75% power less than promised
As expected, it is already creating a scenario of counter accusation as the investors have started accusing NERC of not meeting up to what is required of it as a regulator in protecting their businesses by not fully complying to some clauses of the engaging rules.
First parley
These were the highlights of the first post takeover meeting between the regulator and the companies in Abuja on November 27 at the Abuja Sheraton and Towers Hotel. They became apprehensive when NERC reeled out what it expected of them in the business of supplying power to Nigerians. Some of the expectations included, strict adherence to the Codes and Regulations, grid code, distribution code, metering code, market rules, MYTO methodology, 2012 tariff order, embedded generation, bulk power procurement regulations, connection charges methodology among others.
NERC also charged them to ensure compliance with interim rules during the interim period like the Disco baseline remittance, collection accounts escrow arrangement, loss reduction and metering, compliance with market rules during TEM and beyond, shadow trading and closure of gaps identified by NEXANT.
They are to comply with MYTO methodology, MYTO-2 Tariff orders, make request for tariff review to be in line with established regulation and ensure validation of the base line losses level and customer number.
On the business plan, they are to submit annual investment plans and maintenance plan, strict compliance with business and investment plans, compliance with quarterly targets on metering and loss reduction.
Disappointment
As NERC presents what it wants the companies to do even as many of the chief executives of those companies were absent at the meeting, a development chairman of the commission, Dr. Sam Amadi described as unreasonable. The few that were present particularly, the Distribution companies could not hold back to tell their regrets about what they met as remains of the facilities they bought.
Aside, some accused NERC of not providing them with the required percentage of electricity as provided for in the rules of engagement. The Managing Director of Kano Distribution Company, Dr. Jamil Gwamna disclosed that the company received less than two percent of the designated eight percent distribution allocation to it as provided in the guidelines in non-compliance to the MYTO2 model.
Gwamna told Abuja Metro that: “We don’t want to go to the public to wash our dirty linen. We want to first and foremost have this interaction with NERC then as much as possible design our communication strategy to engage the stakeholders with the necessary information so that they understand the realities and the shift from the public sector to the private sector and also the value we are going to bring in terms of investment and in terms of strengthening the system among other issues.
“There is no special allocation of megawatts to the companies, what we have is the allocation under the Multi Year Tariff Order (MYTO) model which each and every DISCO knows the amount of power it is going to get. It is not a hidden thing because every DISCO knows that if there is a particular generation, it is supposed to get a certain percentage of the capacity and it is there in the model. And the MYTO model is like the Bible of this industry.
Shortfall
“But at the moment, that is not what is happening. It is not happening in my DISCO. We are getting far below what we should get. We are supposed to have 85% of the generated power daily. But we get less than 2%. In fact, in the past weeks, we have been getting lower than 40 megawatts. We get 30 megawatts at most. For example, Kano has a special case. The issue is that whatever we get, we share with Niger Republic and 30 megawatts is sent to them direct. We can’t touch it. So, if they are going to send power to us, the percent should be over and above what they send to Niger.
“We however, believe that there are challenges but were trying to bring them to the knowledge of the regulator since we are not living in a dream world but aware of the realities. We know that things are not going to be rosy for the first year. We know that it will take time before we start getting the full grip of the system.
“We also believe that we will not make money immediately, and we understand that as a fact. But we also want the regulator to appreciate the enormity of the problems we find on ground. As I said, we are barely managing. Revenue has totally dropped. Also, the BPE has sent about 50% of the work force away. There was even a wrong insinuation that the new owners have sacked the workers, but we are not the ones, it is government. What we have are the staff that we met on ground and were handled over to us. All these and so many other issues are causes of the many challenges we have.
“But it is believed that we have to work with NERC to understand the issues and find a way of solving them because we cannot continue to lament over the time but to find a solution.
Worse predicament
However, as the buck passing continues unabated, the right of electricity consumers and their hopes to come out of darkness gradually diminishes daily. Now, who would they hold responsible; NERC, ministry of Power or the DISCOs, or GENCOs?
As it stands, Nigerians continue to groan and wallow in seeming endless darkness. Most of the feelings and opinions captured in the cause of this report are pitiable lamentations.
Mrs. Felicia Atumag is a petty trader that lives in Masaka, a suburb in the neighbouring Nasarawa State who blamed government for first and foremost selling power companies to their cronies who cannot make any difference by making electricity available to consumers.
“I sell pure water and soft drinks here in Masaka and I can only sell well when my pure water and soft drinks are cold. See this hot weather nobody will buy if it is not cold. I depend on ice block because there is no reliable power supply here. We hear that government has sold PHCN to businessmen who will make things better but we don’t have any sign yet of any improvement,” she lamented.
For Mr. Thaddeus Kpagh, a businessman at the Utako district, government has already failed. “How can they sell PHCN to incompetent companies? Now, we don’t even know between the old PHCN and the new investors who owes us the obligation of electricity supply. I say this because nothing has changed after we heard that some companies took over.
“It is the same old story of no gas, load shedding, loss of so and so number of megawatts, one excuse or the other. It is just sad”, he stated.
Paying more
Another contentious issue is tariff increase. Though NERC has debunked reports that there is a plan to that effect, the investors have complained that they are already operating at a loss. Some said they mop up from their other financial sources to even pay workers’ salaries because it is clear that the expected income will not be enough to handle that.
No tariff increase
Amadi recently announced to Nigerians that it has no plan to increase tariff and directed that no one should be cheated. He said: “NERC hereby informs the public that it has not approved any increase in electricity tariff or charges by the electricity distribution companies (DISCOs). We want to make it clear that NERC has not sanctioned any illegal increase by any DISCO. However, customers who feel that they are victims of such purported increases should come forward with evidence. NERC will in turn send out a team to investigate.
“The new owners cannot unilaterally increase electricity tariffs and charges without the express approval of the regulator (NERC). Companies who want to charge more for their services must apply for a rate review. Once this application is received by the Commission, a thorough and transparent process of stakeholder engagement follows. This involves consultation with civil society organizations, consumer groups etc. before any rate review becomes conclusive and official. It is important to state also that different DISCOS have different tariffs. This is due to their peculiar cost profiles, which in turn affects the cost of the service they provide. All these details are available in the full MYTO schedule on our website.
Ensuring compliance
The Commission routinely carries out monitoring to ensure the utility companies keep the tariff order to the letter and that there are no excesses or abuse of customers in terms of service delivery. NERC also advised customers to report instances of excesses or abuse to enable it intervene, bring back the DISCO to compliance and ensure speedy resolution.
“We have a customer hotline manned by staff of our Consumer Affairs Division, the number is 09 462 1414 and we can also be reached via email info@nercng.org . We also have six zonal offices in Calabar, Ekiti, Gombe, Owerri, Makurdi and Sokoto, contact details can be obtained from our website www.nercng.org.
Sensitizing companies
Amadi told Abuja metro that: “The Commission recently met with the new owners of the DISCOs and GENCOs, to bring them up to date on their obligations to the customers in terms of service delivery, as well as to the Commission in terms of meeting up with key performance indicators.
He explained that a number of issues were raised like load allocation which implies that the current load allocation is not in line with the MYTO schedule. The Commission said it had been receiving reports of non-compliance with the loads allocation formula by the system operators.
He said regarding load allocation that there is a need for change management in the Transmission Company of Nigeria (TCN). “A gap in communication between TCN is in part responsible for the perception that the formula is being deliberately flouted. Utilities are not properly briefed of any technical constraints faced by TCN in following the formula. NERC made it clear to TCN that its reporting process needs to be strengthened. Henceforth, all constraints with respect to allocations should be duly communicated to all stakeholders by the TCN.”
The Sun