In this interview with OPEOLUWANI AKINTAYO, the Chairman of the Nigerian Electricity Regulatory Commission, Garba Sanusi, explains why the commission’s 5,000 megawatts target is realistic and the feasibility of delivering improved power supply to electricity consumers
The NERC recently held a meeting with stakeholders in the power sector on how to improve power supply. What was the outcome of the meeting?
Our meeting with major stakeholders in generation, distribution, and transmission was to discuss the state of the industry and also to ensure that the power supply is improved.
In the recent past, electricity generation has nose-dived and this has translated to customers’ poor experience. In our recent engagement, we were able to explain the reasons for the problem ranging from gas supply to vandalism, and infrastructure. Eighty per cent of our generation comes from gas, and the sustainability of gas to those plants has been constrained largely due to breakdown, vandalism, maintenance work, or disruption of supply to the power plants.
When about 300/400MW is lost on the grid, it poses a challenge to the system, resulting in system collapse. However, we are doing a lot to improve the situation.
Experts believe there are issues with power transmission. What is the extent of the challenge with transmission?
Vandals attack transmission houses, leading to loss of massive power generation or load which results in obstruction of what goes into the national grid. This also leads to either partial or total system collapse, which is a huge challenge to the sector.
Another thing, which has been going on for so many years now, is system collapse. We have tried to bring it down but suddenly, we have had it up to four times this year. Though we are not close to where we were before, we are not happy that the trend is being reversed. The recent challenges are very clear. In the past, it used to be weak infrastructure but today, we have external factors contributing to these events. Honestly, it is not common around the world to see people break down power infrastructure or crude oil pipelines. Most of the gas used is associated with gas and when one crude oil line is affected, the supply of gas is also affected.
What steps is the commission taking to end vandalism of transmission lines and make gas available for power generation?
It’s not the duty of the commission to provide security for oil pipelines. However, while we hope that the Federal Government is able to find a lasting solution to the pipeline vandalisation challenges, what we are doing is to make sure generation companies sign gas contracts with gas companies. Although there have been contracts in the past, they were not binding and the parties could decide not to honour them. But with the new agreement, we would make sure no party defaults once the contracts are signed. Whoever defaults will be held responsible and sanctioned.
Any update on the national mass metering programme?
The phase zero of the national metering programme has been completed; we are about to start phase 1 under which about four million meters will be distributed to the distribution companies. This phase will be supported by the Federal Government through the Central Bank of Nigeria. The CBN has been going round the DisCos to find out their needs for this phase of the metering.
How effective are the commission’s complaint channels?
It is important to know that our commissioners have been going around the country as part of efforts to ensure that consumers’ complaints are addressed. We are going around the country, bringing the consumers and DisCos to the table to ensure speedy resolution of consumer disputes. These are ad hoc arrangements, but there are complaints desks in DisCos’ offices around the country. What we are doing is to ensure that consumer protection is part of our day-to-day activities.
Although there have been complaints that when you report to the commission nothing happens, this I can say is not true. Recently, we resolved 100 complaints. The problem is when we resolve these complaints, we don’t make noise about them, but we do receive letters of commendation from consumers who have been treated badly by the utilities but got the issues resolved by us.
In addition to resolving those complaints, we also hold presentations where we talk about customers’ obligations, rights, what they should do if there are issues, and give them addresses of our forum offices to which they can channel their complaints.
As of today, we have 31 forum offices across the country and the purpose is also to resolve customers’ issues. The commission opened another forum office recently in Abeokuta. The next forum offices are coming up in Ekiti and Bayelsa states. We intend to open these offices as soon as possible. In addition to this, we plan to establish a call centre, which is being processed very soon to enable customers to make direct phone calls to the commission to resolve their complaints. I can tell you that we take customers’ complaints very seriously. Over the last year and a half, we have done so much to address customers’ issues. We are working very hard to ensure that our impact is felt across the country.
Have you been able to resolve the issues on estimated billing?
Yes, we introduced capping to protect consumers from crazy billings and, so far, there have been more consumers’ complaints over the capping. The attitude of the NERC going forward is to liaise with the DisCos to find ways to resolve the infractions.
Electricity is an essential service that we expect Nigerians to pay for. All things that are happening in the industry today contribute to the difficulties in getting the sector to work. Large volumes of power generated are consumed either through by-pass of meters or illegal connections.
There is a renewed vigour within the commission to address the issue of capping. There are two elements to it. The first element is the fairness of the cap to the consumers who live most of the time without light and still get bills, or caps that consumers think are not commensurate with the service delivered.
The second aspect is the issue of enforcement. In respect to the first challenge, I am happy to report that the commission is currently working on a process which will ensure that the caps that are applied to customers are based on a wholly three-month average of power supply to these customers. If your neighbour has a pattern of power usage and you are not metered, what we are doing is that by having the monthly revision of the cap, we will ensure that whatever cap you get for this month is reflective of a trend of supply you have been receiving.
Though there is a natural lag in that process ultimately, it will be addressed. Effectively, if your power supply for three months is not too different from your supply this month, the cap you will receive from the DisCo will be in line with that.
DisCos have been accused of rejecting power when consumers are yet to get enough supply. What is the commission doing to resolve this issue?
We have engaged all the stakeholders in the value chain. As like I earlier said, we have also had an agreement with gas suppliers within our regulatory space. Once the contract starts, no party will be allowed to reject power anymore because everything generated by GenCos must be absorbed by the DisCos and adequately paid for. The CBN has agreed to assist and monitor bills collection to make sure each stakeholder in the value chain gets paid what is due as at when due. Power sold will also be adequately monitored and there will be no issue of money ending up in the pocket of one district manager somewhere. Everything will follow due process as soon as the contracts kick start.
You promised to deliver at least 5000 megawatts from July 1. How do you hope to achieve this seeing that we haven’t had such power generation for some years now?
Before now, the plants had generated above 5,000MW and clearly, TCN had delivered above that too. I recalled that late last year, we had 5,400MW. So, it’s not impossible and based on the signed commitment, this will be delivered. What is different now is that all the stakeholders along the value chain are involved and there will be consequences for defaulters. In a situation the GenCos are able to deliver 5000MW and TCN is not able to wheel the same to customers, they will pay the penalty to the generation companies and where the power is available and the DisCos do not take, the DisCos will pay equivalent damages to compensate other participants. But we don’t want to run the business on the basis of penalties, we want it to deliver.
So, beyond paying penalties, we will investigate whatever reason the power could not be delivered and the issue will be resolved. It’s going to be “give and pay.”
Consumers require this service. The DisCos should commit to buying the electricity and GenCos that are generating the power must commit to buying the gas to generate the electricity and the only way it can be done in a sustainable manner is if it’s underpinned by contracts and if any of the participants defaults, obviously, there will be consequences. That is the basic explanation of what we want to do. We are going to meet at least 5,000MW. DisCos must commit to buying it, GenCos must commit to generating it and we will ensure that there is availability of gas. So, there won’t be any story of no gas to produce power.
Not only do we commit to 5,000MW in July, we will also use the opportunity to increase that to 5,500- 6,000MW so that Nigerians can see an improvement and the only way we can do this is by getting stabilised first. That is the new thing we are doing and that is how the market was designed to work in the first place. What is important is that we have actualised a vision that is stable and if we get the target, we will be sustaining it. It does not mean that we can’t generate above 5,000MW, there is still additional capacity, which is the spinning and we have that at Egbin which is 220MW.
