OVERVIEW OF: DisCos Reject Electricity Worth N1.5 Billion
The 11 power Distribution Companies (DisCos) could not deliver 33,958.16 megawatts hour (MWh) of energy made available for evacuation by the Generation Companies (GenCos) within one month; from September 1, 2020, when the DisCos hiked electricity tariff by over 80 per cent for certain classes of customers.
The cost is estimated at N1.552bn and it would have benefited over 10 million registered power consumers within 31 days.
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The analysis of the electricity rejected covered September 3 to October 3, 2020.
According to data from Eskom, South Africa’s largest power producer, an MWh can energise 650 homes in an hour.
The 33,958.16MWh of energy rejected by the DisCos within the 31 days could have provided electricity to 22.073 million homes in one hour, or put differently, powered 29,668 households for 31 days.
On September 1, 2020, the DisCos rolled out the Service-Based Tariff (SBT) that averagely increased the tariff by over 60 per cent for consumers and claimed power supply of over 12 hours daily.
Further checks show that the tariff hike was approved and duly approved by the Chairman of the Nigerian Electricity Regulatory Commission (NERC), Prof. James Momoh.
NERC explained that the tariff implementation was meant to commit the DisCos to improving services, noting that they would not upgrade the consumers under Bands D and E who were assumed to have below 12-hour power supply daily until the services were improved.
Tariff hike yielded no result
Daily Trust recalls that before the tariff hike early September, most of the DisCos had been complaining of high operations’ costs occasioned by poor income from consumers, hence the need for tariff increase to enable them perform optimally.
The DisCos normally buy electricity from GenCos, but if what transpired in September is anything to go buy, the additional income for the DisCos did not significantly impact on their delivery.
The tariff hike was suspended for two weeks from September 28, after several kicks by the organised labour.
On September 29, NERC directed the DisCos to suspend the tariff hike and revert to the previous template of August 31 till October 11, 2020, when it is expected that the organised labour and the Federal Government would have reached a truce to allow them continue with the re-implementation of the tariff hike.
How DisCos failed to supply N1.5bn worth energy to consumers
Analysis of the unutilised energy records obtained from the Independent System Operator (ISO), a section of the Transmission Company of Nigeria (TCN), indicates that from September 3 – a day before the suspension – to September 27, the power firms had already rejected 26,537MWh of energy estimated at N1.213bn; a deprivation to energy consumers.
The GenCos produced 1,575,369MWh (1.575m MWh) energy from which 1,548,832MWh (1.549m MWh) was sent out for delivery.
However, from September 28, 2020, when the 12-day tariff hike suspension came into force, the DisCos rejected another 7,421.6MWh of energy by October 3, 2020 (Saturday). While GenCos generated 494,114.29MWh energy, the 11 DisCos supplied 486,693.13MWh; leaving the 7,421MWh energy undelivered.
That was a loss of N339.1m worth energy that the consumers could have paid for. At least between 79,000MWh to 101,000MWh of energy was generated daily during the period of this analysis.
The total rejected energy worth estimated at N1.552bn within the one month was reached using a computation of residential consumer tariff as produced by the Abuja Electricity Distribution Company (AEDC).
An MWh is equivalent to 1,000 kilowatts hour (KWh). For residential consumers on the Band A who AEDC said they got over 20 hours daily power supply paid N49.75/KWh. While they pay N49,750/MWh, the 33,958MWh rejected by the 11 DisCos translates to N1.689bn.
Residential consumers on the Band B who AEDC said got 16 to 20 hours daily power supply, paid N47.72/KWh. While they pay N47,720/MWh, the 33,958.16MWh rejected by DisCos translates to N1.620bn.
Residential consumers on the Band C who are said to get 12 to 16 hours daily power supply paid N45.69/KWh. For every 1MWh of energy they would get, they pay AEDC about N45,690 per MWh, hence, the 33,958.16MWh that was rejected is worth N1.552bn.
An official at NERC said the fault of load rejection might not be wholly that of the DisCos as transmission losses might account for about eight per cent of the hiccups most times.
The official said, “However, over 90 per cent of this loss resides at the DisCos poor networks and deliberate power rationing techniques.”
Daily Trust reported in August shortly before it approved the tariff increase that NERC had scolded the DisCos for deliberate power outages. According to weekly reports from NERC, the 11 DisCos were cautioned for the deliberate isolation of some 33 kilovolts (kV) feeders to limit energy loads, denying customers of electricity services.
The July monitoring reports also cautioned the DisCos from deliberate refusal to clear faults on their feeders within a stipulated eight hours.
NERC cautioned the DisCos to “stop the deliberate refusal to clear faults on some 33kV feeders within the eight-hour timeline stipulated in the Reporting Compliance Regulation.”
We have capacity to deliver more power – GenCos
While power supply on the national grid has not gone beyond 5,500MW, the Association of Power Generation Companies (APGC) said it had more capacity to deliver to Nigerians if the capacity of the DisCos and that of TCN improved.
The maximum capacity attained by the national grid ever is 5,420MW in August, 2020, but the Executive Secretary of APGC, Dr. Joy Ogaji, explained that the GenCos had current overall average available capacity of 8,589MW and installed capacity of 13,42MW.
Dr. Ogaji said, “If we had a grid capacity that matches our average available capacity, 3,214MW can be made available immediately to Nigerians with the current state of operations of the GenCos and at no additional cost.”
The association said in the first five months of 2020, GenCos had 20,775MW stranded power that was not called for utilisation because the grid could not support the excess power. An official of one of the GenCos said they had never been found wanting in generating electricity which was their core mandate.
He explained that, “What do you do if the electricity is not taken? I am not blaming anyone, but for Nigerians to get value for their money, and for them to agree to tariff hike, all of us in the value chain must make serious investments.”
We’re committed to improving services – DisCos
When approached to explain why they were unable to lift the electricity made available by GenCos, officials of some DisCos were reluctant to speak on the matter.
However, responding to enquiries about worsening power supply situation for certain places in Bands D and E, which are said to have below 12 hours daily power supply, the Abuja DisCo said its ultimate goal was to improve power supply in those areas and move them to higher tariff customers.
The spokesman of AEDC, Oyebode Fadipe, said, “We are always doing our best to improve power supply in these places, but I can tell you as a matter of fact that it will be impossible to stop load shedding given the present situation. It is what we get from the national grid through TCN that we can distribute.”
On his part, the spokesman of Kaduna Electric (KEDCO), Abdulazeez Abdullahi, faulted similar reports about declining situation in power supply across places like Birnin Gwari and parts of Zaria in Kaduna State where the tariffs were frozen.
Abdullahi said, “The new tariff regime is not a blanket increase, but tied to improved hours of power supply and a more efficient service delivery.”
He assured customers that, “Barring circumstances beyond its control, the KEDCO will do its utmost to ensure compliance with the service levels.”
Although the DisCos confirmed they had suspended the tariff hike, the energy rejection has continued. Spokesman of Kano DisCo, Ibrahim Sani Shawai, said the company had suspended the tariff hike until October 11, 2020, and that customers would see the value of the old tariff reflected on their next bills.
Consumer groups fault tariff hike
Commenting on consumers’ dissatisfaction with the tariff increment even though it has been temporarily suspended, the Chairman of the Nigerian Electricity Consumers Advocacy Network (NECAN), Chief Tomi Akingbogun, said, “In seven years of privatisation, we have seen Multi Year Tariff Order (MYTO) summersault with minor adjustments resulting in 120 per cent tariff increase at a go.
“We have seen several unending metering attempts that are always failing, we have seen untested, unscientific, discriminatory billing systems called cost-reflective tariff. We have seen the government approve tariff charges in September, 2020, and not NERC’s 2021. What else can we expect for the people? All thanks to the NERC.”
According to Adetayo Adegbemle, the Executive Director of Power Up, a power consumer advocacy group in Nigeria, the trend has been that NERC continues to increase electricity tariff since 2014 without commensurate improvement in power supply services.
The President of the Nigerian Consumer Protection Network (NCPN), Kunle Olubiyo, told our reporter that the ad hoc committee on tariff review only recommended the increase to the government; believing that relevant authorities would fulfil their promise of holding the DisCos to account by massively providing meters for consumers and rapidly improving their services. NCPN also lamented the failure of the 11 DisCos to provide meters for customers despite various incentives for them.
Daily Trust reports that among the DisCos willing to provide meters on credit to consumers is AEDC. The DisCo said there were provisions for customers to apply for meters and pay in instalments.