For many Nigerians, the recent increase in electricity tariff by the Federal Government would have been more reasonable with improved service delivery even as question as to why the supply of pre-paid meters was stopped keeps begging for answers. JULIET ALOHAN writes.
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The recent increase in electricity tariff by the federal government has been viewed as a move in the wrong direction, an indication that the government is more interested in money-making than in addressing the state of electricity in the country.
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A vast majority of Nigerians maintain that had the pre-paid metering system been effectively implemented, the recent increment would had been done in a more subtle manner, considering the fact that consumers can regulate their consumption and billing, ultimately.
A situation in which tariff is increased at a time when the billing system still lacks transparency and credibility, is described by many as “an unfair move by the government”.
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Arguments continue to abound that electricity bills are manufactured by the Power Holding Company of Nigeria, PHCN, instead of proper meter- reading and a corresponding issuance of commensurate bills.
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“Electricity tariff increment would only be reasonable in the face of an improved power supply, coupled with effective implementation of the pre-paid metering system,” said a power installation analyst, Andrew Ojei.
“It becomes more burdensome when tariff is increased without a corresponding improvement in power supply, in an era when bills are issued at the discretion of the PHCN officials. They say it is an ‘estimate’. What are they estimating? Why did they stop meter-reading and commensurate billing? It all boils down to nonchalant attitude to work. Moreover in Nigeria, anything goes.”
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Experts insist that the interest of consumers will be better represented by a full implementation of the pre-paid metering system; not only with regards to this increment, but as far as the whole electricity industry reform is concerned. They stressed that any reform which does not take into cognisance the need for a total overhaul of the present billing method would be a failed one.
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While many wonder why government chose to increase the bill from N8.50 to N10.00 per kilowatt hour, others can’t help but ask what actually happened to the pre-paid meters. “Why did government stop issuing them? It is not as if there were technical errors with the ones they brought, because all those who were to get theirs then, are still using them,” said a small-scale electricity entrepreneur, Emmanuel Igbeke.
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He lamented the whopping sum he spent on fuelling his power generator and said he would be ready to pay the increased tariff if power was improved, and if he could get his own pre-paid meter. “every month they bill me the way they like, whether or not there was power supply. It is painful to pay for what you did not consume,” he said.
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In the same vein, the director- general, Consumer Protection Council (CPC), Mrs Ify Umenyi, while speaking in March this year, during a meeting with the management of the National Electricity Regulatory Commission (NERC) on consumers concern in the power sector, stated that her office has received numerous complaints from electricity consumers across the country, following the halt in the supply of pre-paid meters.
“A number of consumers have requested and paid for their pre-paid meters, and years after such payments, they are yet to receive these meters… What happens to consumers who have paid for these meters years ago. Will they be compensated for holding back? Was the hold on importation communicated to consumers so they can know how long this hold is for?” She queried.
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Other complaints, according to Umenyi, had to do with the issue of arbitrary bills as issued by PHCN staff without reading meters, poor and unfriendly customer care service, consumer education and sensitisation, communal contributions to purchase transformers, among others.
Chairman of the commission, Dr. Sam Amadi, assured that the new distribution companies will be scrutinised based on standard consumer protection service, adding that NERC will take it up with the distribution companies and ensure that people who have paid for the pre-paid meters get it delivered to them.
He also noted that the numerous complaints were not surprising, going by the present decay in the system and past failures.
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Although analysts have maintained that the pre-paid metering system would effectively eliminate the problems of accumulation of huge debts by customers for service delivered, as well as act as an effective check against energy wastage, the joy with which Nigerians welcomed its introduction in 2006, hoping that it would reduce the recurrence of estimated bills, was however short-lived, with all plans of modified supply mode hitting the rock.
According to reports, however, the halt in the supply of the pre-paid meters was as a result of sub-standard specification. There are allegations that the meters imported into the country did not meet approved specifications, hence its suspension.
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Currently, power generation in the country fluctuates between 3,200mw and 3,400mw, and while a vast majority of Nigerians do not have access to electricity, those who do often get epileptic supply, forcing many to resort to the use of power-generating sets, a situation that has ranked the country as the world’s highest importer of power- generating sets. Fake and substandard generators, most of them imported from China, flood our markets, constituting further cash drain for users, due to frequent breakdown.
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Many respondents who spoke with LEADERSHIp SUNDAY said they were ready to pay higher electricity charges if power supply became steady, rather than depend on the use of the sets, from which they do not derive optimal satisfaction.
“A situation in which someone would sit in his or her office and draw up bills for people, whether or not there was power supply, is not encouraging at all,” said a civil servant, Karo Oghenero. “With the recent increase”, he said, “one cannot help but wonder what kind of country we are in. Why can’t government give us pre-paid meters, so we can decide our fate, just like we do with the GSM, where you can decide not to recharge your phone for a month, and when you do, you enjoy every second of the call?”
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Experts are also of the opinion that the recent decision by government should have come after the currently on-going review and reforms.However, the chairman, NERC, Dr. Sam Amadi has said that the commission recognised the concern expressed by the public about raising prices when power supply was still poor. To address this concern, he said, the NERC has extracted undertakings from the utilities to drastically improve services from generation to distribution to justify the recent adjustment in tariff.
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Amadi who described the adjustment as ‘marginal increase’ explained that the decision was since approved in 2008, and stated that the commission has a responsibility to inform the public as part of its commitment to transparency.
He further explained that the recent adjustment in the average cost of electricity from N8.50 to N10.00 with effect from July 1, 2011, was part of the multi-year tariff order (MYTO) that came into effect in 2008, and should not be viewed as price review.
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Making the clarifications, Amadi, said, “Let it be clear to all consumers that the NERC has not reviewed the existing tariff regime of multi-year tariff order (MYTO), the slight adjustment of the average cost of electricity from N8.50 to N10 from July 1, 2011 is part of MYTO that came into effect in 2008.
“It is in line with the provisions of Sections 76 of the Electric Power Sector Reform Act 2005 that electricity tariff has auto-adjusted to reflect current cost of gas and general inflation. This routine adjustment should not be misconstrued as price review by the commission,” he explained.
The NERC boss said, “It must be understood that the NERC has not reviewed the cost of electricity. Currently, we are consulting widely with stakeholders including sector experts, academia, organised labour, as well as civil society organisations, and we are also welcoming contributions from Nigerians on how to move the sector forward.”
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The commission is however, of the opinion that with proper reforms the sector which is presently a N400b industry, would grow to a N1.5 tr industry within the next four to five years.
This was disclosed recently in Abuja, by the NERC’s commissioner, market competition and rates, Eyo Ekpo, at a seminar on business opportunities for ICT and metering professionals in the emerging Nigerian Electricity Supply Industry (NESI).
He said of the estimated N1.5 tr, about N150b would be spent within the period, to acquire ICT-related assets and infrastructure for the development of the sector, in view of the fact that the federal government has made it clear that it could not fund the sector’s growth alone.
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A reliable source told LEADERSHIP SUNDAY that plans are underway to re-introduce the pre-paid meters. Already, the NERC has approved the sum of N2.9b to the various distribution companies to acquire the pre-paid meters to be distributed in their zones. But this figure, the source said, is like “scratching the surface, when in actual sense it is estimated that between N60 to N70 b is required to import sufficient prepaid meters that would be sufficient for the nation’s electricity consumers”.
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