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N93bn Debt: Mass disconnection looms for electricity consumers as Discos vow to go tough

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…Experts fault Discos, NERC for Nigeria’s power sector challenges

By Seun Ibiyemi and Ariemu Ogaga

Following over N93billion owed by electricity consumers, there is indication that electricity Distribution Companies (DisCos) in the Country would embark on mass disconnection of customers to enable them pay up their debt with Generating Companies (GenCos).

This is coming after the Nigerian Electricity Regulatory Commission (NERC) in it fourth quarter report stated that DisCos collected N210.17 billion out of N303.11 billion billed to customers.

The Association of Power Generation Companies (APGC) had earlier in August 2022 said its members are owed N1.75 trillion for power generated for the electricity market since 2013.

NERC in its 2021/Q4 report,  reported that the quarter had a collection efficiency of 69.34%.

Total billing by DisCos to customers in 2021/Q4 increased by N30.12 billion (+11.03%) from N273.00 billion recorded in 2021/Q3. Revenue collected by DisCos in 2020/Q4 rose by N16.64 billion (+8.60%) from N193.53 billion recorded in 2021/Q3 – this indicates a further reduction in collection efficiency in 2021/Q4 relative to 2021/Q3.

According to the NERC report, collection efficiency is an indicator of the proportion of the amount that has been collected from customers relative to the amount billed to them by the DisCos.

Collection efficiency of 70%, for instance, implies that for every N10.00 worth of energy billed to customers by DisCos, approximately N3.00 remained unrecovered from the billed customers.

The country’s total generation in 2021/Q4 was 9,480.21GWh, which is a 9.05% increase from 8,693.77GWh in 2021/Q3, says NERC. The increase in capacity was due to increased generation from Kainji, Jebba, Okpai, and Geregu plants.

Explaining why DisCos are unable to record 100% billing efficiency, NERC report explains that DisCos are unable to identify who consumes all their energy due to poor customer enumeration and low metering. The report says that billing efficiency combines technical and commercial efficiencies.

For instance, a 70% billing efficiency means that for every N10.00 worth of electricity delivered to consumers by a DisCo over a given period, the DisCo is only able to issue bills to cover N7.00 worth of energy, with N3.00 worth of energy remaining unbilled due to reasons ranging from energy theft, poor distribution infrastructure and inadequate customer enumeration.

Customer enumeration in this regard means that all potential power users in Nigeria, are contacted by their respective DisCos and asked about their future plans of purchasing power. Then, the quantities indicated by the customers are added together to obtain the probable demand for power.

In 2019, NERC ordered all DisCos to carry out customer enumeration, however, the exercise failed to meet its objectives.

In a swift response on recovering its debt from customers, Ibadan Electricity Distribution Company (IBEDC), Spokesperson, Mrs Busolami Tunwase said they will embark on mass disconnection for people who have been owing.

Busolami said, “We’ve been doing enlightenment programmes and keep explaining to them that electricity is no longer a social good; it’s no longer a social service, where it’s government owned and government pays everything.

“And at some point, we commenced mass  disconnection for people who have been owing and who had appealed too; we made effort to an extent in debt recovery to make people realise that we mean business.

“Another thing is to encourage customers to get meter. When all our customers are metered, the issue of bills  will be resolved. It has to be ‘pay as you go,’ and nobody will be held responsible for owing anything.

“We value the patronage of our customers also. We need to stay in business. So, usually we encourage roundtable discussion to find amicable resolution to the huge outstanding:  Customers must pay for us to stay in business.

“It is no longer business as usual, the market operators must be paid. One thing I also understand is that most customers see us as the one who generates electricity and supplies to them.

“There is electricity value chain in the Nigerian power sector today, those who generate, those who transmit, and those who distributes.

“Beside, we now have the regulators. We buy, every electricity given to us is also metered; that means at the end of the month, we still  have to pay for what has been distributed.”

Meanwhile, energy power experts have faulted DisCos and the NERC for challenges in Nigeria’s energy sector.

The Chief Executive Officer of Sage Consulting & Communications, Mr. Oyebode Fadipe and an energy, Agro consultant and foremost Nigerian Bamboo Expert, Mr Eleojo Joseph made this disclosure in a chat with Nigerian NewsDirect on Sunday.

Fadipe said, “This figure of N303bn, I’m sure, is premised on the actual energy sold to the DisCos at the trading points. The issue therefore is that of collection efficiency.

“It is also possible to query the billing efficiency of the DisCos. Did the DisCos bill all their customers? How many free riders have they brought into the billing net? Here, we see the obvious gap in metering of the customers and the role it plays in the revenue recovery process.

“What other factors hindered the DisCos from attaining 100% collection efficiency? Has the allowable technical loss been deducted from the N303bn? These are fundamental questions to deal with. Let me assume that the allowable technical loss has been dealt with before this figure was released.

“In terms of impact, what the shortfall of N93bn means is that the market is unable to enjoy full recovery and that means there is a distortion in its financial plans for a particular period. This will ultimately impact negatively on its growth trajectory.

“For instance, GenCos have always said they are owed over N1 trillion. It is shortfalls like this that bring the GenCos to such position of financial agony and incapacitation.

“For a market that is constantly complaining about poor liquidity, every shortfall brings it closer to poor performance. The DisCos therefore need to look not critically at all of the issue of AT&C losses as the big elephant in the house and see how to dimension it. A key strategy for dealing with this is investment appetite of the entire Market but especially the DisCos because they are the collection arm of the Market,” he said.

On his part, Mr Eleojo noted that, “Foremost, the DisCos and Consumers are playing mouse and cat game due to lack of trust. Most consumers feel shortchanged by DisCos due to over billing and lack of service. No electricity supplied yet the consumers are arm twisted and blackmailed to pay for their inefficiencies through disconnection.

“The DisCos has refused to supply prepaid meters to their consumers due to deliberate tactics. Yet NERC, the regulator, is watching and not enforcing compliance. The consumers has also resorted to all sorts of means to get electricity through back door and sometimes inducing the DisCos staffs to look the other way and getting paid.

“NERC is the bottleneck of the electricity sector.  No transparency and  accountability period. Why should DisCos not meter the consumers?  Do you see such infractions in the telecoms sector? The FGN of Nigeria is solely to be blamed for the problem of the electricity. Electricity should really be commercialised and enabling laws should be drafted for the sector. Small and Mini grids should be incentivised for the sector to take off,” he submitted.

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Court adjourns suits seeking to stop Secondus, Omehia from PDP NEC, BoT meetings

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A Federal High Court, Abuja, on Friday, fixed April 16 for hearing of a suit seeking to stop former Chairman, Peoples Democratic Party (PDP), Uche Secondus, from participating in the party’s meetings.

Justice Inyang Ekwo, in a short ruling, also fixed the date in a separate suit filed to bar sacked Rivers Governor, Celestine Omehia, from attending the PDP’s National Executive Committee (NEC) meeting pending the hearing and determination of the matter.

Titus Jones, a member of the PDP at Ward 5, Ikuru Town, Andoni Local Government Area (LGA) of the state, had filed a suit marked marked: FHC/ABJ/CS/440/2024.

In the suit, Secondus; PDP; acting PDP Chairman, Umar Damagun; PDP Secretary, Samuel Anyanwu; PDP NEC; PDP National Working Committee (NWC); PDP Board of Trustees (BoT) and Independent National Electoral Commission (INEC) are 1st to 8th defendants respectively.

Jones, through his counsel, Joshua Musa, SAN, had sought an order restraining the NEC, NWC, party’s chairman, secretary, and BoT from allowing Secondus to attend any of the meetings pending the hearing and determination of the motion on notice, having been suspended from the party.

Also in another suit filed by Precious Wobisike, a member of PDP at Ubima Ward 8, Ikwerre LGA, Omehia, PDP, Damagun, Anyanwu, NEC and INEC as 1st to 6th defendants respectively.

In the originating summons marked: FHC/ABJ/CS/436/24, Wobisike, also through Musa, sought an order of Injunction restraining Omehia from demanding from Anyanwu, the party’s secretary, any notice of meetings of the NEC.

He also sought an order of injunction restraining Omehia from attending any NEC meeting of the party or participating in the proceedings/deliberations of such meetings in any manner howsoever.

Besides, Wobisike sought an order of injunction restraining Anyanwu from giving notice of meetings of the NEC to Omehia, “not being a former Governor of Rivers State as to be a member of the National Executive Committee.”

He equally sought an order restraining INEC from according recognition to the reports, proceedings, conclusions or resolutions reached at any NEC meeting attended by Omehia.

This, he said, is in violation of the judgment of the Supreme Court in the case of AMAECHI v. INEC (2008) 5 NWLR (Pt. 1080) p. 227, the judgment of the High Court of Rivers in the case of Sir Celestine Omehia v. The Governor of Rivers  & 2 Ors – Suit No: PHC/3317/CS/2022 and Article 31(1)(w) of the Constitution of PDP (2017 as amended).”

NAN observes that Justice Ekwo had, on April 5, granted the motions ex-parte moved by Musa on behalf of Jones and Wobisike restraining Secondus and Omehia from participating in the party’s meetings pending the hearing and determination of the substantive matters.

The judge, who ordered that the processes be served on the respondents within five days, fixed the matter for today for motion on notice.

When the first matter was called, Musa, who appeared for Wobisike, told the court that the ex-parte order had been served on the defendants.

He said the matter was fixed for hearing of the motion on notice.

However, Ibrahim Mark, who represented Omehia, told the court that they were served on Monday and due to the public holiday, they were yet to regularise their processes.

He sought an adjournment to enable them regularise their court documents.

M. S. Atolagbe, who appeared for 2nd to 5th defendants, aligned with Mark’s submission, and Musa did not oppose the application for adjournment.

Justice Ekwo consequently adjourned the matter until April 16 for hearing.

The judge equally fixed the sister case against Secondus to April 16 for hearing.

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Price crash: Dangote Refinery diesel will reduce Nigeria’s inflation — Aliko Dangote

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President of Dangote Group, Alhaji Aliko Dangote has revealed how diesel obtained from the Dangote Refinery can reduce Nigeria’s inflation rate.

Nigeria’s inflation rate reached 31.70 percent in February 2024, according to the National Bureau of Statistics (NBS), with food inflation at 37.92 percent – a 27yr high. The country’s inflation rate has been on the rise since January 2023.

Similarly, the fluctuating exchange rate of the dollar to naira has been pushing the prices of commodities and services. However, with the gradual gains recorded by the Naira over the past weeks, economic experts predict a gradual fall in the price of goods and prices with some manufacturers like Dufil Prima (makers of Indomie), airlines already crashing their prices.

The price of Diesel had also been affected in recent times by the exchange with the cost per litre rising to over N1,700.

Responding to this hike, Africa’s richest man Aliko Dangote has urged Nigerians to expect a drop in inflation given the reduction of diesel pump prices.

Speaking on Wednesday during a chat with journalists after he paid Eid-el-Fitr homage to President Bola Tinubu at his Lagos residence.

“I believe that we are on the right track. I believe Nigerians have been patient and I also believe that a lot of goodies will now come through. There’s quite a lot of improvement because if you look at it, one of the major issues that we’ve had was the naira devaluation that has gone very aggressively up to about N1,900.

“But right now, we’re back to almost N1,250, N1,300, which is a good reprieve. Quite a lot of commodities went up. When you go to the market, for example, something that we produce locally like flour, people will charge you more. Why? Because they’re paying very high diesel prices.

“Now, in our refinery, we started selling diesel at about N1,200 instead of N1,650 and I’m sure as we go along, things will continue to improve quite a lot,” Dangote said.

Speaking further, he said, “If you look at it now, when you are buying N1,650 or N1,700 for a litre of diesel, and that one has been cut off by almost two-thirds, you are now paying N1,200 for diesel.

“Maybe, going forward, even though the crude prices are going up, I believe people will not get it much higher than what it is today, N1,200. It might be even a little bit lower, but that can help quite a lot because if you are transporting locally-produced goods and you were paying N1,650, now you are paying two-thirds of that amount, N1,200. It’s a lot of difference. People don’t know.

“This can help to bring inflation down immediately. And I’m sure when the inflation figures are out for the next month, you’ll see that there’s quite a lot of improvement in the inflation rate. So a step at a time. And I’m sure the government is working around the clock to make sure that things get much better because it is in the interest of everybody that things get better.

Recall that marketers had earlier confirmed that the Dangote Refinery had commenced the sale of Diesel and that the product was dispensed to marketers at between N1,225/litre and N1,300/litre depending on the volume of purchase.

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Lagos-Calabar Coastal road to be completed in Tinubu’s tenure — Works Minister

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The Minister of Works, Dave Umahi has noted that the Lagos-Calabar Coastal road will be completed in President Tinubu’s tenure.

While fielding questions about the project on Channels Television’s The Morning Brief, Umahi said, “We are looking at eight years in the life tenure of Mr President [Bola Tinubu].”

The Minister said each kilometre of the coastal road would cost N4 billion but said the government’s prudence made that possible.

“You know, there are other projects not awarded by me that are also going for about N4 billion per kilometre,” the former lawmaker explained.

“So, I will pride myself, to the glory of God, that this project is the most prudent project that I’m starting. Other projects I made, we are reviewing, we are fighting, and we’re trying to review, the cost,” he said.

Umahi, however, said the cost is a tentative one.

“Well, I cannot sign my signature on that because it can come down, it can go up,” the minister said.

But there are plans to recoup the money via tolling, according to the minister.

“Let me leave out the infrastructure along the corridor. Let me just concentrate on the tolls and I put 50,000 vehicles as an average passage on these toll points per day,” Umahi said on the breakfast show.

“I put N3,000 as an average cost. N3,000 because the cars could be like N1,500, and the big trucks could be like N5,000,” he said. “So, we put an average.”

“In 15 years, you make back the money,” he said, dismissing calls that the cost budgeted for the road was high.

He explained further that there will be security at the toll gates and also some facilities like filling stations.

“At every point of tolling, we also have toll station where we have a kind of relief activities: the restaurants, filling stations, parking lots, and so on and so forth,” Umahi said.

“So, people will now have confidence. In these sections, we intend to put CCTV all through.”

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