The Federal Government, it would be recalled, handed over assets of the Power Holding Company of Nigeria (PHCN) to the investors on Friday, November 1, 2013.
The idea ordinarily was meant to attract foreign and local investments, create jobs, stimulate every other sector of the economy, transfer skills, and technology and make local products competitive by substantially erasing the over 40 percent extra cost that the organized private sector says is added by the necessity of alternative power provision.
In recent times, the hope for a revived power sector is fading fast. Rather than being a solution, it seems to be cultivating more trouble. The Discos have failed to recapitalize, provide services or meet obligations to the detriment of electricity consumers.
Are the Disco’s to be blamed for all this?
No, I definitely don’t think so.
The federal government through their regulatory actions forced DISCOS to sell their product Below their Actual Value. According to the Executive Director, Research and Planning, Association of Nigerian Electricity Distributors (ANED), Mr Sunday Oduntan, has said that power firms are recording a shortfall of N49.38 per kilowatts – They buy electricity at N80.88 and sell it to consumers at N31.50.
He said the 11 DiSCOs lose billions of naira weekly, adding that the development makes it impossible for them to provide transformers, wires, meters, and other equipment to customers. But while the Discos claim that they are being owed by the government agencies, the latter accused them of owing the Nigerian Bulk Electricity Trading Company, NBET, about N800 billion.
Discos have also complained bitterly about energy theft via meter bypass. A report suggests that the loose about 15billion monthly due to meter bypass. According to the Discos, some individuals, companies, and establishment derive pleasure in stealing the company’s energy, while our members of staff work nights and days to ensure regular electricity supply to our esteem consumers.
Although Accurate statistics are not available, investigations reveal that the number of customers who are owing electricity distribution companies is quite on the high side. And instead of offsetting their debts, some customers prefer to bribe officials to reduce the amount paid as the electric tariff, thereby defrauding the companies.
Despite the reforms in the power aimed at improving facilities and service delivery, there are still doubts as to whether the number of their staff and the quality of their expertise is meeting the expectations of the companies and their customers.
Mr. Gbenga Adesanya, an Energy Economist insists that the discos have not been able to improve their service deliveries and the required human capital to drive the much-expected transformation. Other experts also reckoned that the drastic downsizing of the workforce since private investors took over have hampered efforts to improve on the quality of service delivery across sectors and stations.
Although there are many other reasons ranging from Poor equipment, Government policies and The vandalization of facilities that occur too often which is also a serious problem that leads to a huge deficit in the provision of electricity.
Nigeria’s installed capacity has improved to 7,000MW over the last few months, the average daily output as at October was about 4,000MW and is considered too dismal for as economy experts say Nigeria needs a minimum of 15,000MW. The United States Energy Information Agency data reveals that in 2016, installed generating capacity in Brazil was 150,338 megawatts; South Africa 42,000MW, and Egypt 33,000MW.
Elsewhere, the World Bank cites Latin America and the Caribbean as examples where Performance-Based Regulation for setting multi-year tariffs and monitoring compliance with service quality standards by DisCos were effective.
It identified Chile, Argentina, and Peru as countries where privatization led to greater efficiency, investment, and competition. In Argentina for example, power generation post-privatization rose from about 13,000MW in 1992 to about 23,000MW in 2002.