ANED supports ‘Eligible Customer’ declaration in power sector

The DisCos in a document signed by Sunny Oduntan, director of Research and Advocacy of ANED  said they had issue as to whether the timing was right for such a declaration, due to a number of reasons.

Recall,Babatunde Fashola,the Minister of Power,Works and Housing  had on May 15, 2017, declared four categories of eligible customers in the Nigerian Electricity Supply Industry (NESI).

The declaration which permits some categories of electricity customers to buy power directly from the generation company was in line with the provisions of Section 27 of the Electric Power Sector Reform Act (EPSRA) 2005.

The section permits an eligible customer to buy power from a generation company other than electricity distribution companies.

Fashola, had also recently at a news conference in Abuja, said the DISCOs had initially resisted the declaration of eligible customer and were presently reluctant to cooperate with the policy meant to supply power to people the DisCos could not supply.

According to the document, the declaration seems to be a guise for pulling out major customers of the DisCos which will lead to reduction of the funds available to run their business.

It said a provision inherent in the customer eligibility policy allowed the new participants to charge tariffs much higher than the DisCos were allowed to charge.

This, it said was against the competition being canvassed by the minister.

“We are worried that when these better paying customers are removed from the DisCos pool of customers, the tariffs of ordinary citizen and customers will need to be raised to compensate for the revenue loss which, we believe is unwise at this time.

“There is an absence of the level of competition clearly identified in the market rules and volume of energy that is required for such a declaration.

“ There is lack of open access to transmission infrastructure, a critical requirement for such a declaration, and absence of a spot market that allows for ready energy transactions to balance customer requirements against supply.

“While we recognise that the minister has a right to declare eligible customers, we doubt that he has a right to further take money out of our customers’ pockets, with the potential tariff hike that will occur as the designated eligible customers leave the pool of DisCo customers.

“DisCos believe in competition that is healthy, fair with all parties able to compete on merits of their offering and competition that will result in reduced electricity prices for their customers.

“However, providing or promoting a one-sided advantage and seen to be making progress where there is none, is an antithesis of competition.’’

On government move to invest N72 billion on distribution equipment and request to the DisCos to submit a list of projects to expand their networks, we laud the government for seeking to intervene in addressing an issue that will resolve a NESI challenge.

“Investing N72 billion for procurement of equipment and installation to help get the 2,000 MWs to consumers is inconsistent with the facts.

“While an increase in the electricity distribution network is always desirable, the 2,000 MWs that are referenced are presently constrained by other factors other than the distribution network.

“Gas, transmission grid frequency, line limitation and water management, this information can be readily confirmed by access to NESISTATS at mypower.ng. and National Control Centre (NCC) records.

On estimated billing, ANED said the methodology designed and codified by the regulator, the Nigerian Electricity Regulatory Commission (NERC), as an interim billing measure had its challenges.

“The DisCos do readily acknowledge that it has been difficult to get this right in their application of the methodology, and have continuously developed methodologies to improve on same.

“It is important to highlight the fact that since DisCos cannot earn more than the amount allowed by the regulator, for every customer overbilled another customer has been underbilled by the same amount.

“Naturally, the only people who complain are those overbilled while those under billed simply enjoy the benefits without complaining.

“It is, therefore, with great concern and dismay that we receive and attend to complaints of customers that have been billed in excess of their reasonable consumption. ‘’

The association said the  DisCos had adopted  measures to address the challenges of estimation.

It said customers who feel that they had been billed in excess of their consumption have a right to dispute the bill, while paying the average of the last three undisputed bills.

ANED said “check meters’’ had also been installed for some of the customers concerned about their estimated bills to more accurately gauge their consumption.

Other measures the association noted had been adopted include, ready adjustments of disputed bills and conducting of energy consumption audits to better determine customer consumption.

It  said  DisCos  would  continue to work with NERC  to improve the accuracy  of estimated billing  methodology for better customer satisfaction, adding that the method  do not  have additional value  to DisCos when it is  less accurate.

On comments that DisCos were in dispute with entrepreneurs who are investing in the power sector, the association denied the allegation.

“Contrary to the minister’s disposition, the DisCos have no quarrel with entrepreneurs or power developers who seek to improve power supply to their customers.

“All hands and efforts are required to address the scourge of power deficiency that is currently holding back the economic potential of the country.

“However, uncoordinated and ill-thought out initiatives that have minimal prospects for success are not what Nigerians need.