As the Senate probes the power sector under the administrations of former presidents Obasanjo, late Yar’Adua and Goodluck Jonathan, it is difficult not to worry about Nigeria and its epileptic electricity, which has become an albatross, defying all possible solutions. Nigerians have suffered untold hardship as a result of no electricity and the nation’s economy has been shackled by poor power supply. Small businesses, the engine of any economy, have been killed or stunted in growth as a result, leading to mass unemployment and ravaging abject poverty. Amidst the crisis, consumers are being fleeced by the electricity distribution companies (Discos) with outrageous bills, including the recurrent monthly fixed charge. The fixed charge is being collected, whether or not consumers use electricity from the national grid for the period of collection. Citizens are, therefore, paying exorbitant fees for services not rendered. This is unacceptable and must stop immediately.
The retention of electricity fixed charges nationwide has generated a lot of controversy and anger; and for good measure. The contentious collection of the monthly fixed charge of N750, by the Discos is a rip-off to say the least. It is extortion and illegal. The reality is that if one buys a N1,500 recharge card, for those using prepaid electricity meters, Discos collect N750 as fee; if you consume N3,000 a month on analog meters, you get a bill of N3,750. Nigerians across the board have expressed their disapproval and have therefore called on the Nigerian Electricity Regulatory Commission (NERC) to discontinue the nebulous, exploitative and fraudulent collection of fixed charges. NERC has been at pains to explain the rationale to Nigerians, especially as they have seen only marginal improvement in their electricity supply. It is just as well that the Senate passed a motion querying NERC to end the collection.
Reacting to the Senate query, NERC chairman, Sam Amadi, defended the collection but announced that going forward; consumers who do not receive electricity supply would no longer pay fixed charges. He explained that in as much as the charge was a standard industry practice worldwide, the case of Nigeria was undermined by the legacy problem of poor electricity generation capacity. Amadi defended the Discos saying: “the fixed charge is to recover the capital and fixed cost incurred by the various operators in the industry,” warning that: “abolishing the fixed charge component of the electricity tariff would adversely affect the entire system, especially with regards to investments to upgrade the system.”
Amadi’s explanations are as untenable as they are laughable, and raise fundamental questions about his role as chair of the commission charged with oversight over the Discos. This begs the question: on whose side is Amado on? How can NERC say Discos are charging fixed rates to recoup their investments? What investments is Amadi referring to when Discos have failed to even supply pre-paid meters already paid for, yet customers without meters are forced to pay monthly electricity bills based on estimates. You can only recoup investments by making profit from efficient services, not by collecting free money for services not rendered. The Discos are only empowered by law to issue bills for electricity consumed either with prepaid or analog meters. So you can only be charged for what you consume. The law never provided for charging fixed fees, and given the abysmal level of power generation and distribution in the country, Amadi should be relieved of his functions just for condoning this illegality.
The decision by NERC to revoke non-performing power generating licences it issued years ago is self-indicting and another enough, if at all one was needed that Amadi is not the man for the job. The licences were issued on the prospect that, they would contribute to power generation and improve the electricity situation. More than nine years after the licences were issued; there is practically no visible improvement from those quarters. Rather Nigerians have witnessed the deterioration of electricity supply. NERC said it reviewed the status of the 120 licences issued since 2006 and lamented that “many of the licences were yet to move from mere papers to megawatts of electricity.”
The solution to Nigeria’s power problem is not as far-fetched and complex as Amadi wants to make it seem. Attempts have been made to boost electricity supply using the Independent Power Project (IPP) framework. While IPP has proved to be an effective model in other countries, the framework has been haphazardly implemented in Nigeria, thereby making it a failure. Poor planning, deliberate subterfuge and, of course, corruption constitute a big stumbling block to adequate power supply in Nigeria.
To address the infrastructural challenges facing the power sector, the new Buhari administration can make a dramatic change in no time but must first acknowledge the fact that, the situation remains dire because there has been no political will, honesty of purpose and sincerity in all the plans or so-called road-maps. The Buhari administration has a historic opportunity to change tack from years of drift to making Nigeria truly work, and saving the country from the dire effects of suffocating darkness. By tackling the problem of electricity supply in earnest, the Buhari administration would have fulfilled a cardinal part of its mandate.
