The Roles Of Distribution Companies And The Adverse Effect Of Electricity Theft In Power Sector.


Nigeria is presently faced with the challenge of providing sustainable, adequate, reliable and efficient electricity supply to residential, commercial and industrial consumers. This situation has adversely affected the social and economic life of the citizenry. Electricity is a cornerstone on which the economy and the daily lives of Nigerians depend. This essential commodity has no substitute. Unlike most commodities, electricity cannot easily be stored, so it must be produced (by the Generating Plants using any of the available energy resources – Coal, Gas, Oil, Hydro, Solar, Wind or Nuclear) at the same instant that it is consumed.
However, a lot of the consumers of electricity still don’t understand how power gets to their homes and often do not understand the roles of the Generating, Transmission and Distribution companies.


After the privatization of the defunct PHCN, its assets and infrastructure was handed over to private investors who play various roles in the value chain. From generating companies (GenCos) that use available resources to generate power supply which is transmitted by the Transmission Company of Nigeria (TCN) to the Distribution Companies (DisCos).
 There are 11 distribution companies, six generation companies and one Transmission Company as successor companies after the unbundling of PHCN. The Electricity Distribution Companies (Discos) provide last mile services in the electricity supply value chain. DisCos provide the connection between customers and the electricity grid and as such, are plagued with the “last mile problem” of high costs and quality of service similarly faced by last mile service providers in the telecoms industry. Discos are responsible for transforming or stepping down electricity from the high voltage of 132 kV at the transmission level, to the lower voltage levels of 33kV/11kV/0.415kV depending on the category of customer. Electricity in most residential homes is supplied at voltage level of 0.415kV. Discos are also responsible for the marketing and sale of electricity to customers. This is an extremely important function in the electricity value chain as Discos are the cash boxes of the entire electricity value chain. All the revenue needed to sustain the electricity industry is earned through the distribution sector.

As stated earlier, there are eleven successor Discos in Nigeria, arising from the unbundling of the Power Holding Company of Nigeria (PHCN). The Discos and their coverage states are listed below.
Successor Disco
States Covered / Franchise Areas
Abuja Disco                  
FCT, Niger, Nassarawa, Kogi
Benin Disco
Edo, Delta, Ekiti, Ondo
Enugu Disco
Imo, Anambra, Ebonyi, Abia,  Enugu
Eko Disco
Lagos State (Victoria Island, Lekki, Lagos Island, Apapa, Epe, Ikoyi, etc)
Port Harcourt Disco
Rivers, Bayelsa, Cross Rivers, Akwa Ibom
Ibadan Disco
Oyo, Ogun, Osun, Kwara
Ikeja Disco
Lagos State (Ikeja, Surulere, Ikorodu, etc)
Jos Disco
Plateau, Bauchi, Benue, Gombe
Kano Disco
Kano, Jigawa and Katsina
Kaduna Disco
Kaduna, Sokoto, Kebbi and Zamfara
Yola Disco
Adamawa, Borno, Taraba and Yobe
The eleven Discos have been fully privatised and are private sector operated and managed, with the exception of Yola Disco, where the core investor declared force majeure arising from the continued insurgency in North-Eastern Nigeria.
The Distribution Companies are faced with operational challenges, which are clearly visible in their operations and service delivery. Some of the challenges include a lack of sufficient energy supply from grid; old, obsolete networks; health, safety and environmental issues; and a near absence of investments due to poor revenues, external funding constraints and ELECTRICITY THEFT.  Some of these constraints are unfortunately out of the control of the Distribution Companies, however these are concerns that all stake holders must share.
  
The issue of electricity theft is a peculiar problem that has plagued the power sector for years. Earlier in June the PHED announced a monthly loss of N233 million due to electricity theft. Also the Ikeja Distribution Company had announced that over 43,000 meters had been compromised by its users, leading to numerous consumers using electricity without paying a dime for it. These alongside the vandalization of power distribution facilities and equipment still pose a major challenge to distribution companies nationwide.


As we continue to understand and adapt to the reforms currently going on in the power sector, it is important that consumers play that parts in co-operating with the DisCos and do not contribute to the problem facing these companies. Electricity theft and vandalization is at the core of most of the financial and operational challenges facing the power sector and consumers must realise that their actions have legal and economic consequences.  
This epidemic must be eradicated as Nigerians need to understand that there is a cost to producing energy and that electricity is a service we all must pay for. Some of the direct adverse effect of electricity theft and vandalization includes depriving the DisCos of their deserved income which these companies can use as revenue to improve their services as well contributing to the dilapidation of infrastructure in the power sector.
While we bear with the generating, transmission and distribution companies as they put measures in place to improve power supply, we too must do our part to realise the dream of uninterrupted power supply.


To report electricity theft log on to S4report.com

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