"It Is In Our Interest To Give Out Pre-Paid Meters" — CEO, Ikeja Electric - 9jaflaver






“It Is In Our Interest To Give Out Pre-Paid Meters” — CEO, Ikeja Electric

Customers are very vocal in their complaints that Ikeja Electric has refused to give them meters and instead they are given estimated bills. What is your comment on this?

Well, I think it is noteworthy to correct the language often used that we refused to give customers meters. Nobody is refusing to give customers meters. First of all these meters are not available. Let me make this clear, it is in our interest to give out meters, especially pre-paid meters. Like your mobile telephone, you recharge and vend. It costs the DISCOs money to produce and deliver a bill.

At the point of privatisation, there were plans made. And as a matter of fact that was one of the criteria giving to the DISCOs. The reality of the situation is that at that point, we had N160 to N190 to a dollar, but towards the end of last year, we were torching over N500 to a dollar. Meters are not manufactured here in Nigeria. As a matter of fact, what they do is that they import the component and assemble them here. They are often exposed to the foreign exchange fluctuations.

Over the last three to four years, no DISCO has been able to purchase meters as planned because of the foreign exchange challenge. We buy from Nigerian manufacturers who simply buy the product outside. Our revenue is in Naira, and if I set aside a million naira in 2013 to buy 10,000 meters, that amount cannot buy up to 5000 meters in this current FOREX regime. In a nutshell that is what has happened.

Some of your customers also complain that they pay for meters

Nobody has paid for meters post privatisation. In Ikeja Electric, we install meters and people don’t pay for them. In early 2013, we had operated on credit advance payment for metering implementation (CAPMI) which we pay back with interest to customers. In Ikeja Electric, we didn’t start it immediately because we needed to understand the system.

The process is that when you pay, the meters should be installed within 45 days. Of course customers paid for them and they were not given meters and they complained to Nigerian Electricity Regulatory Commission, NERC and the Minister who later cancelled the scheme.

Metering shortage

I personally feel the CAPMI scheme is a positive one because today I get calls from some customers who tell me that they are ready to pay and all I needed to do was to install. We declined because we are under a regulator that stopped us from doing so.

This metering shortage is such that, where we are, we cannot stick to one method and say the DISCOs should provide the meters. Of course, that is what should happen in an ideal situation, but we cannot afford it and we don’t have the money to close the metering gap between now and 2020. We have to come up with different ways to close the metering gap.

The key thing is that the customers should not be exploited. We are appealing to the government to support us and monitor us in any way we fall short.

As I said, we are in a recession; we have to think of ways of getting these things done. As we are aware, the topic of metering is a very emotional subject for Nigerians. All we want as Nigerians is that box in our house. Metering starts from the distribution perspective, where you get the power, because you get the power from transmission.

We metered feeders and transformers. What we started doing in Ikeja Electric was to meter all our feeders and from there to our transformers. The reason being that you can account for the energy that comes in.

What we have done is to make sure that those distribution transformers are metered so that if I give an estimated bill it is reasonable. For most Nigerians, it is not the estimated bill that is the problem, but the ‘crazy bill’. Estimation is still going on and even NERC accepts that fact and there is a methodology for estimation.

Thus, a man who is unmetered, his bill cannot be 30 percent more than the metered one. So, we go to the unmetered public and say to them, if we meter you and your bill is more than what you deem reasonable, having compared with other people that share the same transformer with you, come and talk to us about it. That’s only possible because we are metering transformers. We will still make sure individual customers are metered and we are here to provide solutions to people’s problem.

Is that why you refuse patronising Nigerian meter manufacturers, because they had complained of not been patronised by the DISCOs

I can’t speak for the other DISCOs. However, Majority of our feeder meters are sourced locally. As a matter of fact, we are talking with local manufacturers to give us meters. I say this with all honesty. The objective is to have reliable, functional meters. I would rather patronise my compatriots than go elsewhere. If the meters are available at reasonable cost, it is only in my interest to buy the meters from a Nigerian manufacturer/assembler/vendor.

Availability of the service

The vendors would not manufacture except there is an order, in other to avoid risk. It takes time to put the meter together. Nonetheless, we have no policy against purchasing from Nigerian vendors. We have them on our network.

You have always talked about power theft, knowing very well that some staff of DISCOs are involved on this, what are you doing about it?

It is a systemic issue. Many Nigerians share the idea that power is a social service and should not be paid for, especially when it is not readily available. In my opinion, there are three main challenges; availability, measurement and payment of the service.

If power is available for at least 20 hours daily, the noise about no meter will decline. The first problem we must tackle is the availability of the service. If the service is there, people will be willing to pay. However, when the service is grossly unavailable and the bill appear as an overcharge, people will jump at an opportunity to get the service at no cost. That is how it has been for a long time. So, what should we do about it?

First off, we remind people that it is illegal and there are laws governing this. Thus, when one or two persons are caught, they should be used as an example to send a clear message to the general public. This also depicts transparency of the DISCOs to the public. For example, for Ikeja Electric, if there has been no power for more than 24 hours, a text message will be sent informing you of the power outage and when it would be restored. That’s transparency. This also applies to people who are unmetered and are unhappy with their bill. They can always come to us to review the bill. Candidly, I believe that for as long as the DISCOs are transparent, acknowledge the challenges and proffer solutions to the problems, people will considerably reduce energy theft. Nonetheless, the law is the law. If one is caught stealing power or beating up a staff, the person will be arrested and we would publicise it as the consequences of their actions.

Is the government playing its role to help salvage the crisis in the power sector?

Yes they are. The government’s role in this partnership is regulation and facilitation. We also hear of funds that are pumped into the industry. This is just to ease or reduce the liquidity crisis within the power sector. Yes, the government is actually playing their role. We are actually fortunate to have a Minister in the person of Babatunde Fashola, that understands the challenges and is supportive. When DISCOs and GENCOs fall short in performance, he readily reprimands us.

The Ministry of Power is aware of the realities and it encourages us to look for alternative means, bearing in mind that the customers are at the end of the value chain. You must be seen to deliver quality service. The role of the government is to support and regulate with laws.

Transmission Company of Nigeria, TCN, blames DISCOs for rejecting power. How do you react to this?

Remember I said the demand of power is high. Does it make sense for somebody to give me the power and I will reject? We must be careful because TCN, DISCOs, GENCOs, do not matter to the ordinary man. What they care about is that there is power. In a situation where I cannot distribute to communities I cannot collect money from, I cannot collect such power and TCN could interpret it as rejecting loads. We are working together now, to understand the challenges and TCN understands that. Now for technical reasons, it may not be possible for them to put it here and there, because the system is not as flexible at that. But because we are talking more there is more transparency in what we are doing and the blame game is going down.


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