Constrained power

Editorial

 

What Nigeria lost a cumulative 44,068 megawatts last year is enough proof that the country is far from its goal of regular power supply. If this is staggering in terms of the quantum of power constrained, it is even more so when broken into naira and kobo: about N645.15bn in the year. Power constrained simply means the quantum of electricity that could not be generated and supplied to the national grid.

According to The Punch, the highest constrained revenue of N65.5bn was recorded in March and the lowest loss of N25.5bn occurred last month. About N56.41bn, N54.96bn, N64.64bn, N61.6bn, N61.77bn and N63.21bn losses were posted in January, February, April, May, June and July, respectively. We can continue reeling out the grim statistics. For a power-hungry country, this is not only sad, it is regrettable.

It is disheartening that the country is moving in circle on the issue of power supply. When the sector was privatised in 2013, many people had thought that was going to solve the problems in the sector. That this hope has been at best misplaced, if not dashed outright more than seven years after shows that privatisation is not an end in itself, but a means to an end. Obviously, therefore, there are  structural problems that must be fixed before Nigerians can have uninterrupted power supply.

The major challenges in the sector remain the same:  unavailability of gas, transmission bottlenecks and distribution constraints. It continues to baffle us that these challenges have been recurring without lasting solution found for any of them. Gas shortages have become commonplace resulting in some of the plants being shut down. This is embarrassing. Where we are not in blackout due to gas shortage, it would be power generation companies (GenCos) complaining about the inability of distributors to accept electricity generated by them or the inability of the Transmission Company of Nigeria (TCN) to effectively wheel energy.

That transmission bottlenecks have persisted is an indictment on the Federal Government. This is its own segment of the power mix and if it is unable to deliver on it, what moral right has it to chide other players for not playing their own part well?

People like the Commissioner, Legal, Licensing and Compliance of the Nigerian Electricity Regulatory Commission (NERC), Dafe Akpeneye, have narrowed down the challenge in the sector to inappropriate pricing. They may be right; they may be wrong. But it is difficult to say whether the pricing is right or wrong in a situation where majority of electricity consumers are still being billed based on guesswork. There is no way one can categorically allude to appropriate pricing under this regime of estimated or crazy billing as we know it. The ideal thing is for consumers to pay for what they consume. As a matter of fact, this has always been the point of departure even for many people who support privatisation of the sector: they believe that the place to begin is to let electricity consumers have prepaid meters, a thing the distribution companies (DisCos) are reluctant to do because it would expose the fraud that they hand over to consumers as bills monthly.

While the Federal Government has assisted the companies in diverse way, this is yet to reflect in the quality of power delivered to Nigerians. Recently, the government decided to pay for six million prepaid meters, with the first batch of one million released in October 2020, in its bid to end estimated billing. How far have the DisCos gone in giving out these meters? And are they actually giving them for free? No one can be sure of this. Unless the deployment of the free meters is well monitored, we are afraid it may go the way of other aids the government had given the DisCos.

As things stand, it appears the government has succumbed to the pressures by the DisCos because almost every attempt made by it to ease the challenges in the sector has been thwarted by them. So, it is now the one championing the cause of increased tariff, as it were. A few months ago, the government came up with the policy of capping bills that can be issued by DisCos for different kinds of apartments without prepaid meters; that is being complied with in the breach.

We believe in appropriate pricing because that is one of the  key factors that would bring more serious investors into the system. We have said it before; and it bears restating that NERC has to do more than it is currently doing on its regulatory role. It is not enough to give policy directives, it must ensure they are complied with. That is the only thing that can guarantee improvement in the power sector in a situation where the government is not favourably disposed to reviewing the power contract entirely.

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