The Nigerian Electricity Regulatory Commission (NERC) has demonstrated the value of ensuring that subject matter experts take the lead in the power sector. A number of initiatives have been taken by the Commission lately to steer the privatization of the Nigerian Electricity Supply Industry (NESI) aright. Some of these include the capping of estimated (and sometimes arbitrary) billing of unmetered consumers, distribution franchising, customer eligibility, mandatory migration to cashless payment platforms and recommendation of service reflective tariffs for the distribution companies (DisCos) in transition to cost reflective tariffs.
In ensuring that talks in the Nigerian power sector moved from cost reflective to service reflective tariffs, NERC, after due public consultations, issued an order NERC/198/2020 to cancel the intended hike in tariffs for the DisCos while demanding that the DisCos convince consumers of the need to increase tariffs by improving the quality of their services.
“End-user customers of the 11 DisCos are willing to pay appropriate rates for services rendered by the DisCos, but this willingness is conditioned on guaranteed hours of service, quality of power, and adequate metering; and NOT on improvement promises (that were not implemented) that characterised previous reviews”, states the order. In consultation, consumers throughout the country expressed their dissatisfaction with the quality of service provided by the DisCos and the poor implementation of the Meter Asset Provider (MAP) regulation which has worsened the impact of the fraudulent practice of estimated billing on end-use customers.
Based on the consultations, NERC determined that there shall be no increase in tariffs of end-use customers for at least the next three months. In addition, all future tariff reviews will be based on the outcome of consultations between consumers and DisCos with firm commitments on rates and quality of service. This step, if followed through, will force the DisCos to acknowledge consumers as key stakeholders to be treated with dignity and fairness.
To this end, all DisCos are required to submit performance improvement plans (PIPs) that will ensure better quality of service to consumers in the NESI. The way to guarantee improvement in services to consumers is for DisCos to invest in network reinforcements and system protection. If this is done, DisCos will improve in the “hours of supply” as will be indicated by availability of supply, “reliability”, as will be defined by the frequency and duration of interruptions, and “quality of supply”, as measured by operation within the voltage and frequency limits defined in the distribution code.
To measure and monitor performance levels of DisCos, templates to benchmark and measure key performance indicators (KPIs) have to be developed by NERC. Some of the key metrics that can be used include Customer Minutes’ Lost (CML), Customer Interruptions (CI), System Average Interruption Duration Index (SAIDI), System Average Interruption Frequency Index (SAIFI), etc. Also, information relating to feeder and transformer fault rates, along with the number of resolved or unresolved customer complaints will be needed. Thus, the regulator will have to use a “carrot and stick” system that incentivises performance and penalises non-performance including a compensation mechanism for end-use customers in the event that DisCos fail to deliver on performance targets.
To achieve these objectives and others as contained in the power sector recovery programme (PSRP), the performance improvements plans of the DisCos should be given adequate attention, scrutiny and monitoring. The outputs and KPIs have to be strictly monitored. To monitor the performance targets, NERC will need to recruit monitors and auditors with clearly defined tasks and reporting formats.
To make electricity more available, sustainable and affordable within the current structure we have in the Nigerian Electricity Supply Industry (NESI), a well defined route to cost reflective tariffs via service reflective tariffs is key.
Generally speaking, to enhance the performance of the distribution system in Nigeria, there is need to standardize its design, construction, maintenance, protection and operation while enforcing compliance.
MAKING ELECTRICITY AVAILABLE FOR ALL
The best strategy to accelerate energy access in the NESI is through distributed generation connected via regional and micro grids and or the existing grid system if it does not impede large scale penetration of distributed generation. Apart from the economy of scale, this will help to greatly reduce the aggregate technical, commercial and collection (ATC&C) losses on the network.
As some consumers are unable to foot their energy bills, the Federal Government (FG) should continue to provide financial interventions in the form of loans or subsidies to cater for the energy needs of such consumers.
To sustain whatever progress will be made in the short to medium term in the NESI, “round pegs must be put in round holes” for the next five decades even as we include renewable electricity systems (including rooftop and hybrid solar solutions) in our portfolio of energy mixes for power generation.
Power system analysis including load flow, protection coordination and power system stability studies have to be the norm not the exception in the NESI. For this, the need for accurate data cannot be over-emphasised. Data requirements are as detailed in the relevant sections of both the Grid and Distribution Codes. Doing this will make the distribution system more efficient, protected, reliable, effective, and scalable to a level that is desirable.
The Federal Government is doing alot to put the power sector in Nigeria in the right direction with policies like the Nigerian Electrification Roadmap Project with Siemens, and the implementation of the PSRP among others.
If we can find a way to ensure that these initiatives are implemented correctly, we will have a power system to be proud of. The project management team on the Nigerian side needs to include experienced power engineers.
Aside from political will, NESI needs committed hands who have demonstrable experience in power systems to lead the sector consistently for many decades to come.
A reasonable target for the NESI will be for the electricity value chain to be able to generate, transmit and distribute 30,000MW of electricity by the year 2030.
This I will tag as vision 30-30.
Engineer Idowu Oyebanjo MNSE CEng MIET is a UK trained power system professional.
