BY CHIDO NWAKANMA
Chido Nwakanma is a communication strategist, journalist and journalism educator with extensive experience in IMC and strong interest in developing humanity. He can be contacted at chido@brandhaus.ng and via SMS on +234 (0) 803 723 1111; (0) 812 647 4335
The constitutional adjustment allowing states’ involvement in all aspects of the electricity value chain continues to generate enormous interest.
This column will speak to the experts in the value chain to seek answers to the many questions arising. It includes, in particular, those in the alternative or renewable energy space.
What can or will the states do? What structures will they put in place to tap the opportunity? What are the lessons of experience in our land over the last 20-plus years with electricity management -generation, transmission, and distribution? What should people and communities do to provide electricity for themselves?
It has been a long narrative of expectations and failed promises. The late Bola Ige, as Minister of Power under President Olusegun Obasanjo, assured that he would solve the electricity challenge in six months. It became even more complex. But why would power be such an intractable problem, Nigerians asked. It is a utility like telecoms, and we solved the telecoms challenge with the highly regarded and successful privatisation that Engr Ernest Ndukwe’s NCC delivered.
Why not? President Jonathan’s government then privatised power. Except that it was not like the straightforward exercise for telecoms under NCC. Greed for the acclaimed promise and inherent profits of utilities drove the power privatisation under Jonathan. It delivered a hermaphrodite, neither privatised nor state-owned.
Jonathan’s power privatisation gave us entities with funny acronyms, from Disco to Genco. It was akin to what cynical youth corps members make of NYSC – Now Your Suffering Continues. The Jonathan era also brought the Nigerian Electricity Regulatory Commission to set standards and arbitrate between electricity consumers and the sector players.
The memo below is from a Lagos community and their struggle with electricity issues. Because of the notoriously poor power supply, the community encouraged themselves and sought respite in an Independent Power Plant. It ended in a fiasco in April 2023 after about 18 months. The learning is that the estate’s effort at privatised power suffered all the defects of the Jonathan privatisation and Nigeria’s failed power quest.
“EKEDC-IPP SEPARATION UPDATE.
Dear residents,
As you will recall, the reconnection of houses to the EKEDC supply commenced on Tuesday, April 18, 2023. We are pleased to announce that the process was concluded yesterday (Friday, April 21, 2023).
However, the IPP SP still needs to settle the EKEDC power bill for March of N550k. The Exco/PC became aware of this when a disconnection notice was dropped at the gate yesterday (Friday, 21 April 2023). EKEDC can only reconnect the estate once we settle this bill.
The IPP SP was engaged via telephone by the PC Chairman and via email by the Estate Association Chairman. His response to both was the same. He claims that the Association terminated the IPP contract unlawfully when EKEDC separated the estate on April 11. He also stated that he bought gas on April 11th and needs the funds to settle the bill.
It is essential to note the following updates: Outstanding EKEDC bill is for March; EKEDC disconnected the estate on April 11. Also, note that the IPP SPP did not supply power for a few days before the EKEDC separation on April 11th.
We find it underhanded for the IPP SP to refuse to settle a bill incurred and paid for by residents on the pretext that the contract was terminated. Residents have already paid for the EKEDC bill.
Actions are being taken to make the SP settle this bill so that the estate can be reconnected to EKEDC power. These actions include a pending appointment with the Police at Elemoro Police at 3 pm today. Once again, we thank you for your patience. The journey is almost over.
One community. One people. PC/Exco.”
It has been a tumultuous journey for the community. Their location is one of the fastest developing areas of the new Lagos. Old hands of the former NEPA attest that the area was where NEPA technicians sent disused or troubled machines and electrical parts from other parts of Lagos because it seemed like the Australian Outbacks, remote from large population areas. Then, voila, the place rapidly opened from Sangotedo to Epe.
As with their sister discos, the successor Disco has yet to make the necessary investment. The area thus has a population more extensive than the existing facilities can service atop creaking machinery.
It took one and a half years from marriage to divorce with the IPP. The journey to hell is paved with good intentions, they say. Good intentions guided the dealings of the community with their service provider. They feel that not only did he not reciprocate but threw it in their faces. Was it greed? Inexperience? Deficiency in at least two of the four quotients?
The community first explored premium supply from the Disco, as obtained in Magodo GRA2 with Ikeja Disco and other areas. It did not fly. They then settled on IPP.
Wrong foundations yield unstable structures. First, they invited power equipment vendors who surveyed the estate’s power needs and quoted. Then a bidding process by shortlisted firms. They could not agree with the preferred bidder. Then came a brainwave—a resident into other aspects of engineering bid and offered to solve the problem.
The Power Committee and the Executive Council brought that solution to the Estate. Some objections were the service provider’s lack of experience in power issues and the very generous terms the estate granted him. They overruled all objections, including allowing the service provider to use the existing infrastructure for public power supply for his service. In other words, he controlled the supply from the mains and his plant.
Remember that the Jonathan team avoided renowned players in the power sector and delivered new firms to Nigeria without knowledge, capital, experience, or exposure to the power value chain.
The deal was done, and excitement was turbocharged. The pains of power supply would end—false hopes or too early. First, the plant came much later than anticipated. Secondly, it turned out the vendor overshot and bought a generator three times the community’s power needs. Instead of an independent survey, he relied on the estimate provided by generator sales firms! Third, when the service eventually kicked off, it could only provide power at night because the daytime load was not sustainable for the generator. Fourth, the provider switched off at will or following disputes with the Estate as his primary customer over price increases and related.
Other issues cropped up. Poor customer relations were a recurrent complaint. However, the backbreaker was a continuous price increase. It was always unilateral instead of collectively agreed between the provider and the power committee. It moved from N70 per kWh to N191/kWh in one year. That sparked a revolt: demands to separate the alternative power from the mains so residents could choose. The annoyance was that the provider combined the power from the public power supplier at less than N50/kWh to his to arrive at a “hybrid cost” that residents felt insulted their intelligence. They checked around the other estates in this region of numerous estates with similar challenges and IPP solutions, and the electricity price in the estate was the highest around.
Similar scenarios play out around the country. Residents of Aba and the nine local governments Aba Power should service cried out last week. The complaint: inadequate power supply and inconsiderate billing. It would take Aba Power so long to meet its coverage area at the rate it is expanding. Aba Power and the other discos say they need more power from the gencos. Nigeria has an installed capacity of 29MW but wheels out a mere 5MW for sharing across the land.
Who will bell the cat and solve the power challenges? With the new enabling legislation, who is taking on the task of increasing power generation? How soon will that happen?
Join this conversation. What has been your experience or that of your town/community with electricity? What should we do differently and better if you are in the sector?
-
business a.m. commits to publishing a diversity of views, opinions and comments. It, therefore, welcomes your reaction to this and any of our articles via email: comment@businessamlive.com
