The power sector has continued to struggle despite several efforts to redeem situations using a multi-prong approach to administering solutions. The FG/Siemen project which offered so much hope is leaving Nigerians with receding expectations as implementation is failing in timelines and contents. Covid-19 has been attributed to the reason why the scheduled timelines are not being met and the issue of local content has also been discussed in public space.
The subject of the metering gap has been an issue the FG has a particular interest in with several policies adopted to solve the problem. We have moved from Meter Asset Provider, MAP in 2018 to National Mass Metering Programme, NMMP to bridge the gap. Today, we seem to be going back to MAP still in search of a solution.
The Discos are bleeding, reporting financial losses and they are technically bankrupt. Many experts in the sector are muting the decentralization of the sector to allow more investors to come in. They opined that the Nigeria Electricity Regulatory Commission, NERC Act needs a review to meet post-privatization reality. However, more crisis awaits the sector with the planned subsidy removal. This has remained a burning issue considering the economic situation which seems to have strained and stressed the citizenry beyond capacity.
Vice President Yemi Osinbajo, in July this year announced that the Federal Government will next year end most of its subsidy payments in the electricity sector estimated at N30 billion monthly.
He disclosed this at the opening of the 14th Nigerian Association for Energy Economics/IAEE conference in Abuja. He said the government expected the electricity sector to generate its revenue from the power sector market.
NERC recently updated the remittance expectations for the Discos from 70% to 100% and the removal of government subsidies from the power sector.
Before now, efforts to drive the Discos to improve on their obvious poor performance have failed. Meaning, NERC/FG are expecting the Discos to improve revenue remittance without any real technical nor administrative performance improvement.
The effect of a 100% remittance directive if implemented might bring an end to the sector that has been wobbling both in technical and administrative incompetence and deficiencies.
This simply means the only options left for the Discos to meet this new directive will include:
- Step-up on outrageous over-billing instances
- Increased illegal disconnections with a view to forced payments on contested bills
- More frequent periodic tariff increments
- Loss of focus on system improvement as the management focus will shift from technical to financial
- Gradual decline in technical performance
- Increased outages due to lack of proper distribution infrastructure management
- Increased number of complaint cases without any response or solutions from the Discos
- Systematic breakdown of the Nigeria Electricity Supply Industry, NESI distribution network
However gloomy the outlook may be, quick intervention can save the sector from total collapse.
While experts in the sector will continue to monitor and manage the crisis and overall performance of the NESI, it is expected that they liaise with sector regulatory bodies to micro-manage the situation from a regulatory perspective. This may involve the amendment of required Acts to remove the inefficiencies in the sector.
There is also the need to pay more attention to consumers’ complaints especially through NERC FORUM and use data/updates got from them to proffer solutions to the regulatory bodies.
