The blame game continues. Distribution Companies (DisCos) accuse the Transmission Company of Nigeria(TCN) of load dumping while TCN accuses them of Load Rejection. Vocabularies!!! No Action, Talk Only (NATO)!!!
According to the DisCos, load dumping is when TCN delivers electricity to a substation in a network area that a DisCo knows is not commercially attractive, i.e people are not willing to pay for their electricity bills. The DisCos therefore reject the load; hence, the expression “Load Rejection”.
This problem occurs partly because of lack of metering and a high level of consumer apathy towards payment of electricity bills. Having said that, there is clearly a lack of coordination between TCN and the DisCos. The absence of power system planning enabled by the results of power system studies(PSS)can lead to this situation. PSS needs to be done to identify network gaps requiring investments. Network investment is then prioritised based on identified gaps. Thus, investment in transmission and distribution systems can then be aligned to allow consumers feel the impact of the electricity reform.
There is a dire need for cooperation, collaboration and alignment of the power sector value chain especially in terms of commercial and technical issues that identify constraints affecting demand and supply of electricity.
On the threat to withdraw the licences of 8 DisCos by the Nigerian Electricity Regulatory Commission (NERC) for breach of the licence conditions especially with regards to remittances to the Market Operator (MO) & the Nigerian Bulk Electricity Trader (NBET), to varying degree, DisCos claim their inability to meet up with remittances as and when due is largely because they are being owed by Ministries, Departments and Agencies(MDAs)owned by the Federal Government(FG). Thus, the FG can make payments for MDAs by making deductions from source. Needless to say, all MDAs and and maximum demand(MD) customers have to be metered for this proposition to be effective.
DisCos also claim that the shortfall in remittances can be further traced to a lack of cost reflective tariff(CRT). The usual analogy is that they buy bread at 80 Naira and are asked to sell to consumers at 30 Naira say. The problem with this is that as it is now, the so called cost reflective tariff will include the cost of losses, inefficiency and lack of innovation by the DisCos. In this regard, a transparently determined cost reflective tariff is required for the power sector.
Also, DisCos claim that the remittance level set by NERC is unrealistic and unsustainable. By asking all DisCos to pay 100% of MO bill, DisCos contend that NERC is selfishly taking care of the component of tariff that pays for its own operational expenditures, whereas, payments to NBET which care for the expenses of the Generation Companies (GenCos), TCN and fuel suppliers will never be paid in full. Mind you, from the little remittances and subsidy made to NBET, GenCos are being asked to part with an administrative charge of 0.75% (about 2bn Naira)just for them to get paid. It is hard to imagine how the GenCos are surviving in the sector and would be no wonder if they shut down eventually with or without bailouts.
On the lacklustre performance in the implementation of the Meter Asset Provider (MAP)regulation, DisCos’ position looks as if they were not carried along in the MAP process. This is unfortunate because they were fully carried along. They had the opportunity to improve the regulation as well as discuss what could lead to bottlenecks with a view to working out methodologies for resolving them.
DisCos claim consumers are not able to pay and that is why they are not metered. But we have many consumers complaining they have paid and they cannot get their meters.
DisCos also claim NERC authorised payment by installment for meters as if they were not consulted before the decision was taken. Payment by installment is not a problem at all because, as long as the consumer recharges, the agreed installment will be deducted with use. The problem I see with this is when there is an outstanding bill in dispute by the consumer wishing to acquire a “MAP meter”.
We can’t keep going on like this! While it is true that some of the issues are not due to their own making, DisCos should honourably hand over the management of the companies back to the government if they find the conditions in the environment unworkable.
