It was good that in a space of one week, the Association of Nigerian Electricity Distributors (ANED) which represents the 11 Electricity Distribution Companies (DisCos) had taken it upon itself to explain to Nigerians two knotty issues raising dust in the power industry. The first is why DisCos take ownership of equipment donated by consumers/customers. Second, is justification for billing customers on estimation. The association should be commended for at least finding it worthy of addressing Nigerians on what it feels is right in sustaining the business of DisCos on one hand and delivering exorbitant charges with less efficient supply and yardstick to our homes, businesses and offices on the other.
First, I have addressed the issue in a national daily. And for the interest of the general public and the good of DisCos, it is trite to also address constructively the second which bothers on justification for estimated billing of electricity consumers. First, what is estimated billing? It is an arbitrary non-conventional method of allocating monthly charges for unmetered customers without any valuation, acceptable yardstick or scientific approach.
According to newspaper reports, the Electricity Distribution Companies (DisCos), through its megaphone and umbrella body – ANED had insisted that; “billing of end-users by estimation is normal across the world. They stated that the practice is scientific and follows necessary methodology, stressing that the masses must drop ‘misinformation’ that the companies were billing consumers unnecessarily to meet revenue targets.”
The Estimated Billing Methodology, 2012 issued by the Nigerian Electricity Regulatory Commission (NERC) is the only guide to be relied on in estimating customers at all but it is complied with more in breach by DisCos. Sections 8 and 9 vividly captures how estimation of bills for the unmetered MD customers – MD and Non MD customers respectively can be done.
However, for the purpose of this discussion, we shall be dwelling on section 9.(1-3) – “Unmetered Non-MD Customers.” It states inter-alia; “the methodology applicable to these categories of customers and others not captured above shall be termed “Inventory of Connected Load Method”. This method involves the subtraction of all the metered load from the energy supplied to the feeder (33 or 11KV) and the application of an appropriately determined availability factor and correction of losses which is aggregated among the various numbers and classes of customers supplied by the feeder.
9.2 The method shall require the determination (in advance through statistical analysis of historic information) of the averages of the proportions of the consumptions for the various classes of customers in the urban and rural areas and the relationship derived below is applied to determine the proportion of the energy supplied to the feeder which shall be proportionately distributed among the various customers.
9.3 The above methodology shall be determined as follows: On the assumption that the total grid energy supplied to a Disco is equal to the energy on all its feeders, if energy on all feeders is X then, Energy available for billing, Z =X – µX. Where µ = % of Distribution technical loss (10% – MYTO rate). Then Z =X – 0.1X = 0.9X. If Zm = Energy consumed by metered customers (both prepaid and manually read) Zu = Energy consumed by unmetered customers. Zi = Energy of illegal connections (non Technical or commercial loss of 18% – MYTO rate for the Disco), then total energy available for billing which should be equal to the total energy billed will be, Z = Zm+Zu+Zi.
Therefore, the energy which should be billed to unmetered and legally connected customers, Zu = Z –Zm- Zi = 0.82Z – Zm. Or Zu = 0.72X – Zm (in terms of the total grid energy to the feeders). Considering that load on a feeder may be prone to shedding, availability factor= α = (Number of hours the feeder is on) / (Total number of hours in the billing cycle). Then total energy for the unmetered customers becomes Zu = α Zu = α (0.82Z – Zm). Or Zu = α Zu= α (0.72X – Zm).
Determination of the load for each Class and a customer in the class, If ℓC represents the proportion of the load consumed per customer class based on a historic figure per feeder (which could be the feeder being considered), then ℓc = Where: Na = Number of Customer in a class in the feeder Ca = Average consumption or load of a class in the feeder NiCi = Total Consumption or load of all classes in the feeder.
Consequently, the consumption per customer per class of unmetered Customer can be determined as: Zci = ℓc. Where: Nc =Number of customers in a class being considered in the feeder.
Consumers/customers deserve the right to understand the entire processes culminating into the huge charges received monthly. Therefore, customers should be eager to learn by asking relevant questions. However, it is a known fact from time immemorial that; DisCos from all indications sit at the comfort of their offices, minus the metered load only from each feeder and allocate whatever amounts they feel like to any consumers/customer.
They purposely neglect the other components of the procedure such as analysis of historic information of the averages of the proportions of the consumptions for the various classes of customers in the urban and rural areas and the relationship derived to determine the proportion of the energy supplied to the feeder which shall be proportionately distributed among the various customers. One had thought that doing the right thing, inviting the general public possibly to seminars and conferences to share knowledge by ANED serves better purpose than choosing the easy way out or trying to be smart by half. What is the big deal in being transparent? What does it take DisCos to teach their customers how they are billed?
One of the major problems in the power sector is the manifest inability of DisCos to meter the majority of Nigerians. ANED said, “for billing to be fair, consumers are expected to be provided with prepaid meters. But effort to meter consumers has been problematic in the country.” Metering of customers cannot be problematic if DisCos have genuine intention to do so. The Mass Metering Programme (MMP) is currently being sabotaged by some DisCos. Meters provided under that programme are currently being sold to desperate consumers/customers. One DisCo in Northern Nigeria had embarked on a road show selling the said meters under the guise of Meter Access Provider (MAP) designed to roll out three million electricity metres.
NERC’s Key Operational and Financial Data of the Nigerian Electricity Supply Industry (NESI) for January 2019 to September 2021 showed that out of the 12,784,685 registered customers as at September 2021, only 4, 772,906 representing 37.33% had been metered in seven years while 8,011,779 representing 62.67% of electricity consumers in the country were still on estimated billing.
After failed deadlines and prescribed numbers of customers to meter annually, DisCos had no option than to estimate customers to cover cost. It is no “misinformation” that DisCos are billing unnecessarily and even arbitrarily to meet targets. It has become a routine monthly nightmare for the estimate. Imagine billing an estimated customer between N21000 – N50000 per month while his neighbour who feeds from the same feeder/transformer but has PPM buys a token of between N5000-N10000. Where is the justification and science in billing?
Furthermore, ANED’s Executive Director for Research and Advocacy, Sunday Oduntan, said; “the companies were only concerned with market ‘receivables’, which is the money owed to the DisCo for a service already rendered. This is money earned by the DisCo based on the energy consumed. If this is what is being wrongly and ignorantly defined as cooked up figures, then it is our responsibility to help save the public from those spreading this misinformation.” DisCos has to for emphasis cover its cost of “receivables” to break even, but it should not be to the detriment of non-metered customers.
The scam in estimated billing had recently caught the attention of the National Assembly. In 2018, the House of Representatives moved to criminalise electricity estimated billing systems except where a consumer’s metre cannot be accessed by the service provider. The Speaker, Femi Gbajabiamila had sponsored a bill in the 8th House titled; “An Act to amend the Electric Power Sector Reforms Act to Prohibit and Criminalise Estimated Billing by Electricity Distribution Companies and provide for compulsory installation of prepaid metres to all power consumers in Nigeria and other related matters.”
The bill introduced when Gbajabiamila was the House Leader was passed into law but was not assented to by the president. However, it was reintroduced again in the 9th House.
What are the intended provisions? “DisCos must install prepaid metres on the premises of a consumer within 30 days of receiving an application and payment from such consumer or face penalties. The bill stipulates that any Disco which fails to provide prepaid metres within the stipulated window is stopped from denying a consumer/customer access to power supply, disconnecting them, where connection has already been granted, or reverting to estimated billing.”
Once the piece of legislation becomes law, it will become an offence for Discos to estimate bills, and any contravention of the provision attracts either a one-year jail term or a fine of N1 million or both. The House has concluded work on the bill and sent the same to the Senate for concurrence before it will be transmitted to the president. The Speaker is by this medium encouraged to work harmoniously with the Senate for quick concurrence and the executive to ensure presidential assent to the new bill. He should also resist external pressure and complete the good work he started in the interest of public good.
Advocacy, Public Relations and Information management are the best, worst and hardest global professions. The best, when managers address issues with the truth, convincing facts and superior argument. The worst and hardest is when managers flog a dead horse. In this case it is obvious at the back of the minds of the public that the manager is simply brow-beating the matter. The snag most atimes is that the managers in a bid to cover up the truth and please their paymasters leave some uncovered trails which will continue to hunt them after spewing deliberate falsehood.
This ANED in my estimation is de-marketing DISCOs. Sunday Oduntan seems to take Nigerians for fools. It is good to defend and promote official issues, but telling bare faced lies undermines good PR. The old and new developments in the power sector are disheartening. A country where children joyously shout ‘Up NEPA’ in appreciation of restored power supply after days, months or years of darkness means a lot.
The Nigerian Electricity Regulatory Commission (NERC) has not lived up to its expectations with respect to estimated billing. The commission tends to work in cahoot with DisCos to exploit consumers/customers. Even after issuing policy guidelines for conduct of business in the power sector, it ends there. The commission does not care if DisCos adhere to the rules or not. How many times has NERC issued statements to the effect that customers who are not metered should not pay estimated billing? How many times did NERC direct DisCos to meter certain customers annually without result?
It is on record that customers are at the receiving end of the general inefficiency of DisCos. Therefore, it is our obligation as Nigerians to speak up and ensure that the right things are done. DisCos have flagrantly abused the procedures for estimated billing of electricity consumers/customers. Therefore, one thinks there is no justification for estimated billing of electricity customers.
***Sunday Onyemaechi Eze, a media and communication specialist, wrote in via email@example.com