3 years on: Power companies must adopt smart technology to address revenue loss, energy theft

As the Power companies of Nigeria marks three years after buying over electricity assets, Industry experts have warned them to perfect a strategic deployment of smart technology in their metering and monitoring processes as only then can they overcome the challenges of huge revenue loss owing to Energy theft.

Electricity Distribution Companies of Nigeria (Discos) for three years have experience a larger percentage of revenue decline which is traceable to energy theft where people consume electricity without paying for it.

Thomas Dada, Managing Director, Frontier Oil and Gas Limited a recent interview advocated for a more stringent smart technology deployment to be put in place to tackle the growing incidents of Energy theft.

Distribution Companies in Nigeria needs to invest in smart technology that will detect if a consumer is bypassing their meters or not, Dada observes that 40 per cent of generated electricity in the country is lost to theft and that a lot of people who use electricity do not pay for it.

He recommended that the only approach to solving the issue of electricity theft is by heavily investing in smart technology and prosecuting those who steal electricity, those who by-pass meters, and those who use it without paying for it.”

In his words, “These energy thieves are not only short changing the distribution companies but also the entire nation. He added that it is affecting everybody that has invested in the power sector

Only recently Electricity distribution companies reported unpaid electricity bills from residential, commercial and industrial consumers as well as the Ministries, Departments and Agencies of the three tiers of government to the tune of N39.1bn by pre-privatisation and N39.5bn post-privatisation as well as the outstanding interest of N15bn.

The figures as presented by the Electricity distribution companies shows that Abuja Disco, N18.6bn; Eko Disco, N8.6bn; Kaduna Disco, 8.2bn; Enugu Disco, N7.2bn; Ibadan Disco, N6.8bn; Ikeja Disco, N5.9bn; Port Harcourt Disco, N6.8bn; Benin Disco, N5.8bn; Jos Disco, N6.5bn; Yola Disco, N2.4bn; and Kano Disco, N1.2 bn.

Dada further pointed out that huge investment in smart technology would eliminate this bottleneck in the future stressing that technology deployed by cable television network is a clear example of how smart technology can be deployed.

“the smart technology that operate with Cable television network ensure that subscribers are automatically disconnected at the expiration of their package, Discos needs to work out something along this line if they ever want to address the energy theft issue” he said.

Industry experts noted that the use of technology and the development of software can help save the country from unnecessary expenditure and fraud in the power sector as evident in the financial sector where the use of Remita, a payment gateway developed by indigenous software company, System specs has been successfully used by the federal government for the Treasury Single Account (TSA), which has helped the government account for all monies gotten from all Ministries, Departments and Agencies (MDAs).

However, John Obaro, Chief Executive Officer, System specs told BusinessDay that it is unfortunate that the company which has been described as core to the TSA has been accused of fraud instead of being supported and encouraged as an indigenous software company to grow Nigeria’s economy.

“While our currency is struggling and Naira’s exchange rates against major currencies have almost doubled in less than a year, we still have to source enormous foreign exchange to service the huge foreign-owned software assets in use by government at all levels and across the private sector,” he said.

“The beneficiaries are those countries that have nurtured their software industry and caused us to be dependent on them even in critical areas of our national life. Let us imagine what would have happened if GIFMIS and IPPIS at OAGF are powered by indigenous software and not one from Estonia and USA respectively. If ITAS at FIRS is an indigenous software and not from Canada; if Bank Verification Number (BVN) platform deployed by NIBSS is powered by an indigenous software and not from Germany; if Real Time Gross Settlement (RTGS) platform at CBN is powered by indigenous software, and not one from Sweden,” he added.

Pius Okigbo, the immediate past president of Institute of Software Practitioners of Nigeria (ISPON) explained that the challenge facing the Nigerian software industry is that locally developed solutions are lowly priced simply because they are made in Nigeria.

“There is nothing we cannot write in software programs but nobody is ready to trust us and pay us huge amounts of money as to make us bigger players in Nigeria and this is a big tragedy,” he said.

He added that, “We have developed some good solutions that foreign solutions cannot match. Foreign software became the humongous behemoths they have become because of huge patronage. They all have their humble beginnings”.

ICT stakeholders say that it will be very difficult to find companies to invest in the only solution to curb power theft which is software technology, as the local software companies are not being patronised and encouraged and foreign technology is an unrealistic option, now that the country is struggling with foreign exchange scarcity.