Bewildered Senators yesterday learnt that Electricity Distribution Companies (DISCOS) are technically bankrupt. Chairman, Senate Committee on Privatization, Senator Ben Murra- Bruce, told his colleagues that the way out of the worsening power situation in the country is to revisit privatization exercise.
Senator Murray-Bruce spoke following a motion on “DISCOS, electricity consumers and the burden of overbilling” sponsored by Senator Dino Melaye (Kogi West).
The Bayelsa East lawmaker said that those expecting the DISCOS to install meters in their houses should forget the idea since it was obvious that the DISCOS lacked the resources to buy meters.
He said, “The DISCOS are technically bankrupt. They have no money to buy maters. Unless we revisit the entire privatization there will be no solution to the power sector. We have to urgently revisit the privatization exercise in its entirety.”
Vice Chairman, Senate Committee on Power, Senator Bukar Mustapha (Katsina North) also stressed the need to address inefficiency in the power sector.
Mustapha who said that the value chain in the power sector is weakest at the DISCOS level insisted that the country was sitting on an emergency that should be drastically addressed in the interest of the country and its development.
He said, ‘The problem we have is the inefficiency within the system which we have actually so far not decided to address. I will give you a small example: Nigeria has an installed capacity of 12,522 Megawatts of power.
“We have non-available capacity of 5,300MW. We have non-operational capacity of 3,180; meaning that the amount that is actually available is just over 4,000 Megawatts out of 12,500.
“We have transmission loss of 228MW, we have distribution loss of 447 Megawatts. At the end of the day, only 3,800 Megawatts reaches the consumer. And we have commercial loss of more than 36 percent.
“So, what is actually being paid for out of the over 3,000 Megawatts is only 1,800 Megawatts. So unless and until we decide to look at these inefficiency within the value chain there is no way we can have better electricity generation, distribution and also billing system in the country. So, I agree that the model they have used for privatization has not worked. And unless and until this inefficiency is looked at, it will not work.
“If we have capacity to generate 4,500 Megawatts but we can only get less than 4,000 that is more than 75 percent of the capacity is not utilized. It means that we are sitting on an emergency; something has to be done drastically to address this problem. The value chain is weakest at the Discos because they are the ones who collect the money. And you never know how much money is being collected because they have failed to install the meters that are needed. We need millions of metres.
“On Monday, we visited a meter testing facility because each meter has to be tested. But there is no capacity to test the millions of meters in Nigeria. The discos are supposed to provide the meters; they don’t have the money and technical capacity to provide these meters. So it means we have to revisit this as urgently as possible”.
Melaye in the motion said that the Senate should be worried over the astronomical rise in the electricity bills across the country.
He lamented that years after the privatization of the power sector, DISCOS handling the retailing and marketing of the electricity of the country’s electricity supply have not been able to effectively meter their consumers thereby leaving millions of their consumers at their mercy through estimated billings.
Melaye asked the Senate to note that with the privatization of the power sector, many Nigerians hoped that things would get better, especially with regards to the improvement of power supply and quality of services to be rendered.
He noted that the customers had expected that upon take-over by the new owners, that metering would be one of the issues that will be urgently addressed to restore confidence in the industry.
He said that metering is the only way to determine actual consumption, “instead the DISCOS came with astronomical monthly increase in the name of cost reflective tariff.”
Melaye said that he is saddened that DISCOS prefer to hound consumers with jaw-dropping estimated bills by devising ways and means of smartly retrieving meter from consumers in order to realize targeted profit margin through the imposition of arbitrary billing system usually referred to as ‘crazy bills’ by customers.
He observed that two bedroom of three bed apartment receives a monthly bill of N25, 000 to N40,000 respectively.
The outrageous billing, he said, will no doubt, impact negatively on the fight against corruption ‘as a man on N18,000 monthly minimum wage with electricity bill of N25,000 monthly, will do anything possible to settle his electricity bills.
Melaye lamented that electricity consumers without meter are now at the mercy of the DISCOS with very little of no protection for them from the Regulator, the Nigerian Electricity Regulatory Commission (NERC).
Before the upper chamber would further debate the issue, Chairman, Senate Committee on Power, Senator EnyinnayaAbaribe, informed the Senate that the report of his committee on the issues raised in the motion were extensively covered in the report.
He said that the matter would be better discussed when the report is laid.
Deputy Senate President, Senator Ike Ekweremadu, who presided over the plenary agreed that laying the report would offer Senators opportunity to better understand the issues at stake.