4 FACTORS AFFECTING POWER BILL COLLECTIONS

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DISCOs have continually borne the brunt of the power sector as a whole. They are faulted with everything ranging from the poor power supply experienced nationwide, to an impending blackout, to the current liquidity issue in the sector. Some accusations like the unaddressed meter gap and failure to improve on their existing network are true but an in-depth review reveals that they are caused by some factors beyond their control.

DisCos are private businesses before utility companies, and like all businesses, the collection of monies due for products sold or service rendered is important. The power sector already operates at a loss due to a non-cost-reflective tariff, if the DisCos cannot be paid in full for services rendered, challenges like the metering gap and the lack of investments will never go away.

For DisCos to improve on their existing network and attract the much-needed funding, they must clog one of the financial leakages- collections -currently experienced. Despite a non-cost-reflective tariff, DisCos collect only about 40% worth of the electricity distributed within their franchise area. The 60% loss is caused by a number of factors which can be attributed to either the DisCos or their customers.

 

Factors Affecting Electricity Bill Collections

  • Entitlement

Sometimes, customers feel entitled to the electricity provided by their utility companies. They believe electricity is a social amenity to be provided by the government to each citizen free of charge.

This idea is wrong for apparent reasons. First, if electricity bills are not paid, how do the DisCos pay the GenCos who have to pay for the gas used to power generators? Or how do the DisCos pay their staff? For every electricity bill not paid, the higher the loss a DisCo makes, and the higher the chances of a DisCo down-sizing to reduce its losses. The closer the nation also gets to get to the “impending blackout”.

 

  • Energy theft

Like all forms of theft, electricity theft is a criminal act. It is using electricity without paying for it; be it meter bypass, direct hooking or any other form. As long as you’re using power and not paying for it, you are stealing electricity. Electricity theft is also a punishable offence in Nigeria according to the Miscellaneous Offence Acts.

You may not be stealing electricity but do you report people stealing electricity? If you think it does not affect you, you’re wrong. If you’re on the same line as someone stealing electricity, you could end up paying for the electricity they use.

Also, electricity theft makes power service less reliable and lowers electricity quality for paying customers. Next time you experience “low current”, it could be because of the electricity thief you have not reported.

 

Read: Why Electricity Theft Should Bother You

 

  • Customer dissatisfaction

Customer dissatisfaction can be caused by a number of issues, including customers themselves.  Customers are usually reluctant to pay bills when they feel the said bill does not tally with their hours of supply. However, low quality of power and low power supply can be caused by the various forms of electricity theft. Electricity theft can also cause “outrageous bills”.

Customer dissatisfaction can also be caused by DisCos. Sometimes, DisCos bill customers who have not had power for prolonged periods. A dissatisfied customer will be very reluctant to pay his or her bill no matter the cause of dissatisfaction.

 

 

  • Inaccurate customer database

Having a database is important, more so an accurate one. Databases are important and can help DisCos plan and strategize their power distribution. It can also help DisCos track the electricity consumption of each customer, this will mean customers will be billed more accurately.

Until DisCos have accurate databases, they will find it difficult to bill correctly. According to the Chief Corporate Service Officer of Kaduna Disco, Mr Uday Mishra, the major challenge of the Discos has remained their inability to collect all that is due to them from the electricity they supply to consumers. He noted that Discos in the country did not get paid for the power they sold to 60 per cent of their consumers.

“All Discos are surviving hardly because they have just 40 per cent of legal consumers on their billing net while the majority of consumers are involved in bypassing, theft, non-payment of bills and direct hooking,” said Mishra.

If DisCos meter all customers and improve their database, it would greatly improve their collections.

 

The thing is:

As a Nigerian in constant need of stable power, I believe DisCo collections must improve before addressing the non-cost-reflective tariff. If collections cannot improve now, it will be the same thing when a cost-reflective is implemented.

Improved collections also help ease the current liquidity crisis in the sector, encourage more people to invest, improve the existing network and lead to actualizing our power goals

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