Estimated Billing as the bane of Nigeria’s power sector reform

By Solomon Asowata

 

News Agency of Nigeria (NAN) Features

 

When the Nigerian Power Sector Reforms started in 2005, there was optimism that the country would get its act together within the next few years and increase its power generation, transmission and distribution to be able to meet the demands of its huge populace.

 

The hope was hinged on the private sector’s involvement after the unbundling of the ineffective Power Holding Company (PHCN) Plc following the enactment of the Electric Power Sector Reform Act, 2005.

 

Consequently, the assets and liabilities of PHCN were transferred to private power generation companies (Kainji Hydro Electric Plc,  Shiroro Hydro Electric Plc,  Sapele Power Plc,  Robin Power Plc,  Afam Power Plc and Ugheli Power Plc).

 

The transmission arm was transferred to the Transmission Company of Nigeria (TCN), which is fully owned by the Federal Government that also owns a 40 per cent stake in the 11 Electricity Distribution Companies (Discos).

 

The Discos are: Abuja Electricity Distribution Company, Jos Electricity Distribution Company,  Ibadan Electricity Distribution Company, Benin Electricity Distribution Company,  Enugu Electricity Distribution Company and Kaduna Electricity Distribution Company.

 

Others are Kano Electricity Distribution Company, Eko Electricity Distribution Company, Ikeja Electricity Distribution Company, Port Harcourt Electricity Distribution Company and Yola Electricity Distribution Company.

 

Almost 15 years after the reforms started, the Nigerian power industry remains characterised by unstable power supply, owing largely to inadequate installed capacity, frequent breakdowns and high inefficiency levels.

 

Nigeria currently accesses far below its installed generation capacity of about 7,228MW, as less than 5,000MW is generated and transmitted.

 

Some experts believe that one of the major challenges plaguing the sector is estimated billing by the Discos which has made them unable to think outside the box on how to improve their own end of the electricity value chain.

 

Presently, there is a bill before the National Assembly seeking to criminalise estimated billing which has the support of many Nigerians, due to the exploitative nature of some of the Discos.

 

In the House of Representatives, the bill was passed in October 2019.

 

The Nigerian Electricity Regulatory Commission (NERC), in its Second Quarter 2019 Report, said 57.08 per cent of end-user customers were still on estimated billing as at the end of June 2019.

 

According to the commission, out of 8,881,443 registered active electricity customers, only 3,811,729 (42.92 per cent) had been metered.

 

It said complaints relating to metering and billing also accounted for 52.80 per cent (77,036) complaints received by the Discos out of a total 145,959 complaints received in the period under review.

 

The commission believes it will take about three years to close the metering gap in the country at the current pace of the Meter Assets Providers (MAPs) scheme initiated by the regulatory agency to fast track provision of meters to customers.

 

Worried by the incessant billing disputes between end-user customers and the Discos, NERC resolved to cap estimated billing for various categories of electricity consumers from February.

 

NERC’s Chairman, Prof. James Momoh, says once the regulation is released, unmetered customers will only pay what the commission compels Discos to collect as estimated bills.

 

But Mr Adeola Samuel-Ilori, National Coordinator, All Electricity Consumers Protection Forum, says the move will only embolden Discos to slow the pace of metering customers, especially with the government’s plan to increase electricity tariffs.

 

Samuel-Ilori said: “If the regulators are up to their tasks, should capping estimated billing be their priority?

 

“It clearly shows that they have been pampering the Discos when they are supposed to ensure that all customers are metered.”

 

According to him, until customers begin to get value for the electricity consumed, the power sector will remain comatose.

 

Similarly,  Mr Sural Fadairo, National President,  Energy Consumer Rights and Responsibilities Initiative, claims some electricity customers have refused to pay their bills due to disputes with Discos.

 

“If people are refusing to pay now because they are disputing their bills, will they now pay if it is further increased?

 

“What they need to do is to meter all electricity customers so that we can end the issue of estimated billing,” he said.

 

Mr Uche Ileogbunam, Founder, Energy For All, says estimated billing poses a great risk to the overall power sector value chain and will continue to hold it down.

 

“We talk about under-remittances by Discos and this is partly caused by refusal of some customers to pay their bills as and when due because they feel shortchanged.

 

“Some customers get as high as N30, 000 monthly bills which they believe is unfair.

 

“So, the Discos find it hard to meet their obligations to the Nigerian Bulk Electricity Trading (NBET) Company which in turn affects payments to TCN and Gencos for their services.

 

“I think we can only get this aspect right when the majority of customers have been metered and pay for energy being consumed.”

 

On their part, both Ikeja Electric and Eko Electricity Distribution Company say they are vigorously pursuing the metering of customers within their network of operations.

 

Mr Felix Ofulue, Head, Corporate Communications, IE, says the company recently opened bid to add more Meter Assets Providers (MAPs) to fast track the metering of  its customers.

 

According to him, IE is targeting the registration of over a million electricity customers in the next three years.

 

He said: ‘’We just carried out advertisement to bring in more MAPs because we envisage that there will be more demand in 2020.

 

“We, as a business, are encouraging more customers to embrace pre-paid meter because we are not interested in estimated billing.”

 

Also, Mr Adeoye Fadeyibi, Managing Director,  EKEDC, says the company remains committed to ensuring that all its customers get metered under the MAPs scheme.

 

“This is to stop incessant complaints over the estimated billings by customers, bridge the metering gap and accelerate meter roll out to enhance revenue generation,” he said.

 

Despite these assurances, many experts believe criminalising estimated billing by Discos is the way to go and are urging the National Assembly to urgently finalise passage of the bill.

 

They say this will force the hands of the Discos and other players to put in more efforts to eliminate such practice, thereby ensuring that Nigerians get the right value for their money. NANFeatures

**** If used please credit News Agency of Nigeria (NAN) and the writer.

SON tasks importers on manufacturing

The Standards Organisation of Nigeria (SON) has urged importers to venture into manufacturing to create wealth and job opportunities for the nation's teeming unemployed youths.

The  Director General,  SON, Osita Aboloma said that the importer should make efforts to establish manufacturing and assembling of electronic products  to boost trade.

Aboloma said such initiative would ho a long to save the country's foreign exchange since most of what is imported into the country can be manufactured locally.

He advised importers to get the required standards to make their products competitive, noting that with the African Continental Free Trade Agreement (AfCFTA) accented by President, Muhammadu Buhari, Nigerian manufacturers must up their game so as not to be overwhelmed by foreign goods.

Aboloma was represented  by the Director, Inspectorate and Compliance Directorate, Mr Obiora Manafa, at a one day sensitisation programme with importers and pdealers of electronics in Alaba international market in Lagos.

He said adhering to standards was the surest way to bring back the glory days of Alaba international market.

He expressed SON's readiness to work with local manufacturers to make their goods exportable in a bid to earn foreign exchange  and boost the Nigerian economy

He said, "Instead of faking established brands, build your own brands and make money from it. We are also advising them to go into manufacturing, we cannot continue to depend on import of electronic products. 

" For example, Made in Nigerian cable is one of the best  all over the world. The electronic  products  importers should emulate the cable sector by going into manufacturing.

" We are open anytime to help you to  in selecting tmaterials and  equipment for you start producing. This is better for you and for the economy at large."

According to him, the fight against substandard products is a big one, saying that a lot of unscrupulous are been made to face the law for dealing in substandard products to serve as deterrent to importers who have intentions to indulge in the nefarious act.

He pointed out that SON has in its warehouse substandard electric cables waiting for court order to be destroyed, while also restating it's commitment to bringing down the influx of substandard goods into the country.

"We are ust waiting for the court order to destroy, while we have obtained court orders for some of them, very soon we are going to do destruction so that people will see the extent we have gone in this fight and we are not going to relent on our effort in our fight against substandard product. It is a very huge market filled with a lot of smugglers bringing in goods without SONCAP certificates. We fish out these people by going to their warehouses and even outside the market. It is a continous fight and we are really making progress," he added.

He stated that the electronic dealers have agreed to join hands with SON to fish out the bad eggs giving Alaba international market a bad name, saying that the workshop was aimed at bringing back the lost glory of the biggest market in West Africa.

He said in line with the federal government's commitment to creating an enabling environment for the ease of doing business in Nigeria, the agency has come to further demonstrate its deep commitment to continual improvement in products and services delivery.

He added that SON has made concerted efforts to facilitate trade and fast track the import process by upgrading its portals to be functionally active, reduce its service charges, reduced the turn around time through automation and currently test-running the deployment of electronic demand notes, receipts and cargo clearance to reduce the turnaround time and human contact in its service delivery.

Earlier, the president, Alaba International Amalgamated Trader Association and Executive Chairman, Electrical Dealers Association of Nigeria (EDAN), commended SON's integrity, capacity for work and tireless contribution and encouragement toward ensuring that the market stands out as an exemplary leading market with quality assurance practices.

He highlighted that the agency's sensitisation visits have created great positive impact in its industry, stating the association's readiness to collaborate with SON to drive its zero tolerance for substandard imports programme.

"We are here for you as brothers, friends and partners in progress to comply and collaborate with you to ensure product quality and standard and at the same time look forward for an up-to-date information on standardisation and its benefits, advice and assistance on your product quality management for an improved cost effectiveness and adequate technical support to match the quality required for competitiveness in global trade," he said.

He appealed to SON to regulate the movement, arrest and closure of warehouses by working with the office of the Executive Chairman of the association.

The president general, EDAN, High Chief, Stephen Agabige, commended SON's enforcement activities in the market, saying that before now it was very difficult to sanitise the electrical market, but for the intervention of SON it is gradually winning the war.

"When they came here last week, we took them round in our bid to show our support to SON and to say that we are not in support of fake products in our market. We showed them the people who indulge in fake products. We also have a committee established to ensure sanity in our market. We have also given them more power to carry out their duties and in two or three weeks time, every product in our market will be original," he said.

He urged dealers to do the right thing, alluding that the sensitisation was an eye opener for most importers to make them competitive.

Over 700 participants attended the events

Air Peace begins flight to Warri

Nigerian and West African largest carrier, Air Peace on Friday, Sept. 27, 2019 began flight operations from Lagos to Warri,in Delta State

The airline's inaugural flight which took off from the Murtala Muhammed Airport 2, Lagos touched down at the Osubi Airport , Warri at 11.15pm.

The ERJ-145 aircraft piloted by Capt. Crosby Otobo was welcomed with a water guard salute by fire fighters stationed at the airport .

Mr Allen Onyema, Air Peace Chief Executive Officer, said the move by the airline to extend its operations to Warri was part of the airline's no-city-left-behind project 

Onyema, represented by Mr Adeyemi Ayodeji, Manager, Ground Operations, Air Peace, said Warri was the 14th city the airline was operating into in Nigeria.

"We want to assure our passengers that this is just the beginning. We have plans to introduce flights from Warri to Port Harcourt and also from Warri to Abuja, " he said.

Onyema said the airline operates to five regional locations in West Africa (Ghana, Liberia, Sierra Leone, Gambia and Senegal) and had on July 5, 2019 began flight operations to Sharjah- Dubai in the United Arab Emirates.

According to him, Mumbai in India and Guangzhou , China will soon come on board as part of the airline's expansion on the international routes with its fleet of B777 aircraft.

He said the flight to Warri would be once daily and assured the Air Peace passengers of on-time departure and safety which were very key to the airline's operations.

Receiving the airline's officials, Mr Paul Erugbenu, Chairman, Osubi Community and the Community Secretary, Comrade Williams Eyarunu, thanked Air Peace for extending their operations to the airport.

Also, passengers on board the inaugural flight who were gifted various items by Air Peace expressed delight with the development noting that it would make the route more competitive for the airlines thereby reducing air fares.

Increase in tariff not panacea to Nigeria power sector's problems, says expert

An energy expert, Dr Damola Omole, Head, Power and Energy Strategy, Dangote Industries, says increasing electricity tariff will not solve the the problems bedevilling the power sector in Nigeria.

 Omole made the assertion on Wednesday at the ongoing Power Nigeria Agenda Exhibition organised by Informa markets in Lagos.

Omole said increasing the tariff would only amount to funding inefficiency, adding that the Federal Government should intensify efforts to encourage more players to invest in the sector.

He said the government should dilute the Distribution Companies to minority stake and thereafter sell its major stake to more credible players.

According to him, consumers should be metered before effecting tariff increases as estimated billing is generally unfair.

Omole also urged the government to look into the issue of supply and cost of gas to the thermal power plants in order to reduce the over N7.5 trillion lost annually to irregular power supply.

He noted the country's manufacturing sector was worst hit by the irregular supply with about 17 million small and medium scale businesses spending over N2 trillion annually in running generating sets.

Omole said: "Manufacturers only get seven hours of supply on average with the balance of over two-third self sourced.

"Grid supply should be 20,000MW for manufacturing sector to thrive but supply is currently less than 4,000MW.

"Grid power supply is irregular and unpredictable for manufacturing processes."

He explained that electricity consumed through alternative means cost N78 per kilowatt while supply from the grid was at N32 per kilowatt , thus increasing the cost of production for manufacturers.

According to him, the ripple effects of power shortages include reduced production, job losses, outright closure of factories or relocation to other African countries.

Omole noted that the power sector reforms  had failed to yield the desired result due to the failure of the generating companies,the transmission company and the distribution companies to align for a common purpose.

He said the lack of synergy between the layers in the energy value chain had resulted in over 2,000MW of electricity not been supplied to the end users by the distribution companies.

Omole also decried the lack of industrial clusters across the country which would have been of great benefit to Nigeria manufacturers and enable them compete with their contemporaries outside the country.

On his part, Mr Gareth Rapley , Group Exhibition Director, Informa market, said the exhibition which had over 130 local and international exhibitors was put in place to find solutions to the challenges facing the power sector in Nigeria.

Rapley noted that the energy problem was not peculiar to Nigeria and could be overcome with collaboration between the government and the private sector. 

He said the conference therefore was an opportunity for players in the energy sector to dialogue and exchange ideas on how best to address the issues confronting the sector.

Nigeria Adopts 10 standards to boost oil and gas industry

Industry demands and the need to keep up with best international practices in the Oil and Gas sector in Nigeria has spurred Standards Organisation of Nigeria into paving the way to adopt ten America Petroleum Institute(API) Standards for the nation.

This was disclosed by the Director General/ Chief Executive Standards Organisation of Nigeria (SON) Osita Aboloma Esq. during a joint Technical Committee (TC)meeting on Oil and Gas / Petroleum and Petro Chemicals convened in Lagos recently

Speaking at the meeting, the Director General SON, represented by the Director Standards Development Mrs. Chinyere Egwuonwu revealed that all the standards are critically relevant to operations in the Oil and Gas industry, hence the need to adopt them in collaboration with the stakeholders as Nigerian Industrial Standards (NIS)

According to him, adopting of international standards as national standard is not a new development, especially where the standards are elaborated by global leaders such as API who since 1919 have established a clout for convening subject matter experts in establishing, maintaining and distributing consensus standards for the oil and gas industry.

He further indicated that, “the API standards being adopted today are recognised not only for their technical specifications but also for their third party accreditation which facilitates acceptance by international bodies and has been a cornerstone in developing standards for the worldwide oil and natural gas industry.”

However, Aboloma cautioned that “in adopting international standards we must ensure that the standards are not in conflict with our statutory regulatory requirements and special consideration should be on or environmental factors, economic considerations, security of products, national interest and most of all global best practices.”

According to Aboloma, the nation’s oil industry does not exist in isolation therefore the standards adopted will ensure the availability of the NIS, enhancing market competiveness, prevention of dumping of goods, promoting export and a reliable basis for technological transfer and industrial development.

The Joint Chairmen of the TCs, on Oil and Gas/ Petroleum and Petrochemicals, Prof Joseph Ajienka of the University of Port-Harcourt and Prof Sunday Ojolo of University of Lagos sitting in for Prof Boniface Okorie of the UNN respectively, in their varying capacities spoke separately during the meeting

They both appreciated the DG SON for giving them the opportunity to serve, while exhorting all the participants to carry out what was described as a call to national duty with zeal and ensuring their comments and contributions are vibrant and robust enough to achieve the purpose of the TC

The API Standards adopted and rechristened NIS include are as follows:
API RP 50 2013 Natural Gas Processing Plant Practices for Protection of the Environment

API RP 520; 2014 Sizing, selection and Installation of Pressure-relieving devices in Refineries Part 1 Sizing and selection
API RP 520 2: 2015, Sizing, Selection and Installation of Pressure- Relieving Devices in Refineries Part II Installation
API 553: 2012 Refinery Valves and Accessories for Control and Safety Instrumented Systems
API 554: 2007 Process Instrumentation and Control

API 12L: 2008 Specification for Vertical and Horizontal Emulsion Treaters
API 2000:2014 Venting Atmospheric and Low –Pressure Storage Tanks
API 12F:2008 Specifications for Shop-Welded Tanks for Storage of Production Liquids
API 12D: 2008 Specification for Field Welded Tanks for Storage of Production Liquids
API STD 610: 2011 Centrifugal Pumps for Petroleum Petrochemical and Natural Gas Industries.

Mr Agboola Afolayan, Deputy Director Standards Development / Head Chemical-Tech moderated the proceedings of the day while Engr Oljuie Head Lagos 1 office / Group Head LPG Engr. Nwaoma Olujie was also on hand to support in driving the process which culminated in the adoption of the API standards

Stakeholders represented from the oil sector include representatives of, Cakasa Nig Comp. Ltd., Peachlite Eng. Consulting Services, Winelight Analytical Systems, Lopa Energy Ltd. Addax Petroleum, Dorman Long Engineering, Mobil Producing Nigeria and agencies like Nigeria Society of Chemical Engineers, FIIRO, Nigeria Institute of Mechanical Engineering and the Nigerian Institute of Welders.

AfCFTA: MAN, SON Partners to Checkmate Illegal Trade Deals

The Manufacturers Association of Nigeria (MAN) and Standards Organisation of Nigeria (SON) have partnered to checkmate illegal trade deals that might exist since Nigeria recently signed African Continental Free Trade Agreement (AfCFTA) .

Although, the president, Manufacturers Association of Nigeria (MAN),  Mr Mansur Ahmed stated that the agreement would open lots of opportunities for the Nigerian economy, but stated that it comes with potential threats and challenges where unscrupulous dealers in substandard goods would hide under it to bring in fake and substandard goods.

To address this challenge, he called on the present administration to empower SON in terms of human, technological and institutional capacity  in a bid to combat dumping post AfCFTA.

In his words, “I believe this creates a new demand for SON and other regulators to scale up their activities to prevent dumping. By doing this, we are not protecting the interest of only the Nigerian manufacturers, but the African manufacturers at large.

"It requires an even greater cooperation with stakeholders such as MAN. I believe this is what the agency is working on now and we will certainly support any effort in this regard.”

He added: “SON has built capacity, they have incorporated new technology in their work, but also the challenges in the ports have increased and with the signing of the AfCFTA there will be more challenges that would be facing SON. I think returning SON to the ports is something we should look at.”

According to him, plans are ongoing to sign a comprehensive Memorandum of Understanding (MoU) with SON which would enable both parties to work more extensively, while also addressing issues confronting the manufacturing sector.

“The MoU would address all issues as they arise in a continuous basis, because it is not something we can do once and forget about, we will be interfacing SON continuously and therefore, we need to find a framework which will be provided by the MoU that will enable us to resolve issues as they come without creating challenges to operators or regulators,” he said.

“This is a meeting we should have had a very long time ago. The importance of this meeting to MAN is very clear where we now have a basis to understand the objective and requirements of SON with regards to ensuring continuous quality of products not just for the ones manufactured locally, but also imported, because this ensures a market that we can compete effectively.

"We have had for too long substandard goods being imported into the country which does lots of harm to our economy and specifically to our operations in the sector and I think with this kind of collaboration and cooperation with the regulator and the industry.

"I believe that the possibility of reducing the importation of substandard goods would be brought down to the barest minimum,” he said.

The Director General, SON, Osita Aboloma, said the meeting was aimed at safeguarding the local manufacturers to achieve accelerated industrial development, saying that SON and MAN’s robust relationship have spun over the years.

He pointed out that the standards body is also working with MAN as a team to protect the manufacturing sector against the influx of substandard products.

He said going forward, any importer who abuse the import permit given to manufacturers to import raw materials and machinery for local production would be answerable to SON.

Aboloma added: “Like every other sectors, there are bound to be bad eggs who take advantage of loopholes by importing finished products instead of raw materials and machinery. We have also agreed that anybody that takes advantage of this window to import finished products instead of raw materials that we have given concession to will be answerable to us in his personal capacity, he will no longer be sheltered under the concession given to MAN.”

“Import permit is different from SONCAP that is more rigorous for people to bring in goods into the country. So when you have permit to bring in machinery or raw material, but if you bring in finished products, it is illegal whether it is substandard or quality because you have already abused the system, you are not only taking advantage of it to bring in substandard products, but also shortchanging the federal government revenue to earn foreign exchange.  

"We  have perfected plans to sign an MoU to checkmate the lacuna, fashion out definite rules of engagement between SON and members of MAN,” he said.

Air Peace Captain Debunks Report Saying Aircraft Landed Without Tyres

 

Simisola Ajibola, the captain who operated the Air Peace flight on July 23, which had nose wheel collapse, has debunked reports, saying the aircraft landed without tyres.

 

She said the incident, which took place at the international runway of the Murtala Muhammed Airport, Lagos, happened after the aircraft touched down.

 

“We had a very serviceable aircraft. Our aircraft are machines that are well maintained. It wasn’t the first flight of that day. When we flew the aircraft it was perfectly in good shape.

 

“The report about initial landing without tyres is not true. The incident happened after we touched down.  I didn’t go into the air without tyres, we weren’t on a decent without tyres. Some reports say we called for emergency while in the air and that is not true. It was after we landed we asked for emergency services. So whatever happened, happened on the runway that day,” Ajibola added. 

 

However, Tunji Oketunbi, corporate communications manager, Accident Investigation Bureau, (AIB) said the bureau has begun investigation into the issue and will come up with preliminary reports soon.

“It is a cumbersome process. Some components have been retrieved from the airline to help with the investigation. So it will take some time but we are doing everything possible to ensure the report is out sooner than expected,” Oketunbi added.