The 11 electricity distribution companies (DisCos) in Nigeria are said to have lost N258.3billion in revenue for what they reportedly supplied from November 2020 to September 2021, data from the Nigerian Electricity Regulatory Commission (NERC) revealed.
But some consumers expressed doubts over the claim, saying the figures being bandied are not a true reflection of the reality.
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They said millions of Nigerians had not been metered and the amounts they were asking customers to pay monthly were exaggerated.
Some of them said they got light for few hours, had no appliances that consume power but received bills asking them to pay thousands of naira every month.
However, experts said the way out of the lingering problems in the electricity sector is for all stakeholders to deliver their mandates and government to sanction violators.
How debts accrued
Daily Trust Saturday reports that the DisCos sent out bills to their customers for N819.4bn worth of energy consumed within 11 months but received N561.1bn of the expected revenue.
Analysis of the data indicates that the loss is about 31 per cent of the total revenue expected in the Nigerian Electricity Market (NEM).
A breakdown of the losses across the 11 DisCos shows that Kaduna DisCo led with the losses as it raised N65.1bn bill within the 11-month period.
However, it lost N43.4bn of that amount to non-payment, which is 67 per cent gap and the highest loss-operating DisCo as at September 2021.
Yola DisCo raised N13.4bn bill but received just N6.8bn and lost N6.6bn, which is about 50 per cent loss. A new private firm, Quest Electricity, has taken over its operation from the Bureau of Public Enterprises since November 2021, with an expected significant loss turnaround in the next two years.
The third highest loss was recorded by the Jos DisCo, which was to collect N33.9bn but lost N16.4bn, representing 48 per cent loss of what it should earn.
The Benin DisCo supplied electricity worth N76.8bn but could not collect up to N34.3bn, representing a 45 per cent revenue loss gap.
Ibadan DisCo was to get N101.5bn revenue within the 11 months period but it lost N34.9bn; Enugu DisCo was to be paid N80.1bn by its customers but lost N29bn and received N51.1bn.
Ikeja DisCo sent out a N135.9bn bill, which was the highest. It, however, lost N22.9bn to non-payment. For the Port Harcourt DisCo, out of its N57.2bn, it lost N22.2bn, which is a 39 per cent.
Eko DisCo lost N18bn to non-payment of bills by power users after it sent out N105.5bn bills. Kano DisCo, which was to get N49.3bn, however, did not get N15.4bn from the expected collection, while Abuja DisCo sent out N100.3bn bill, from which it lost N15bn.
An analysis of the revenue collection data indicates that Ikeja DisCo, which operates in Lagos, topped the revenue chart as it collected N113bn during the 11-month period. It was followed by Eko DisCo, also in Lagos, with N87.5bn revenue. Abuja DisCo followed with N85.1bn revenue.
The middle-range had Ibadan DisCo with N66.6bn. Enugu DisCo, which covers the five eastern states, earned N51.1bn. Benin DisCo earned N42.5bn. Port Harcourt DisCo collected N35bn, Kano DisCo collected N33.9bn, Kaduna DisCo collected N21.7bn, while Jos DisCo collected N17.5bn. The least revenue of N6.8bn was collected by Yola DisCo within 11 months.
Daily Trust Saturday reports that the DisCos have been having issues with bill collection since the 2013 privatisation, especially with hurdles across the military formation.
MDAs, security forces as highest debtors
Debts owed by ministries, department and agencies (MDAs) of government were over N100bn last year, with reports of security personnel allegedly harassing DisCos workers over electricity bill payment.
It was gathered that the estimated billing method was solely responsible for the way the customers pay their bills in part.
Most of those contacted said that when they were given high bills monthly, they could only pay a part of it for that month. However, this leaves the bills to accumulate.
Mr Bello Ojo, a resident of Nasarawa State and customer of the Abuja Electricity Distribution Company (AEDC) said there was a time bills brought by the DisCo was going above N10, 000.
“Since I could not afford to pay that amount, sometimes I would go and pay N3, 000, which I believe is what I should pay. But anytime they bring such a bill, the amount keeps accumulating because they believe the remaining N7, 000 is a debt,” Ojo said.
Halidu Sunday, a Kaduna resident served by Kaduna Electric, also expressed a similar concern.
“The marketers also understand our plights and would tell us to pay what we have at the moment. So, we tried to reduce the bills, but because they are monthly, it got to a point that mine rose to over N100, 000,” he said.
Also, Ibrahim Hamidu, a customer in Jos, said the last bill he got from the Jos DisCo was reading N1, 670,000.
He said, “Every month they would bring a bill of N12, 000 and I would go and pay N3, 000. I strongly feel I don’t consume electricity of N2, 000 but I give them N3, 000 because I want to live in peace.
“I don’t have water heater or electricity cooker in my house. We only have bulbs, so how can we consume electricity of N12, 000 monthly?” he asked.
“Honestly, I am not indebted to any electricity company; after all, how much is my house worth? I think the government should review the agreement with the DisCos. It should compel them to provide meters for us because it is the fairest deal.
“Poor people like us can go and buy the number of units we can afford; and if we don’t have money we can live without light. It is wrong to leave us on estimated billing.”
Ann Gabriel, who lives along Rukubu Road, also said the DisCos should be checkmated for giving preference to industrial areas and areas where the elite live.
“The problem is that until recently when they started bringing meters to our areas, most of us were on estimated billing.
“And while they bring bills showing N10, 000 and above, we only get light for few hours; sometimes deep into the night when we don’t even need it.
“On the other hand, when you go to the Ahmadu Bello Way or Joseph Gomwalk Way where you have many companies, they get light for more than 20 hours a day.
“It is the same thing when you go to Millionaires Quarters in the outskirts. Some of the rich people there have forgotten when last they put on their generators,” she said.
There are allegations in some places that while the federal government is keen on metering all Nigerians, some DisCos are reluctant to help actualise the dream because they allegedly get more money from estimated billing compared with what they get from prepaid meters.
Daily Trust had last week reported that some electricity consumers in Abuja had expressed agony over what they described as “exploitation” following the removal of their prepaid meters and placed on estimated billing, on the pretext that their meters were faulty.
Abuja and three states – Kogi, Nasarawa and Niger – are the franchise area of the AEDC, which is one of the 11 distribution companies operated by private investors since the power sector privatisation in 2013.
Around the Wuse II axis of Abuja, Musa Halilu told our reporter that early December, officials of the AEDC from the Wuse II customer centre inspected meters in the estate, after which they said three were faulty.
“They removed three of the six meters and said they had the mandate to replace faulty meters. But nearly a month later, they brought an estimated bill of N30, 000 each for the three flats.
“I said we were expecting the replacement of the meters, but they said they were not ready and we would have to be on estimated bills for at least three months,” he said.
What pained Halilu and his neighbours the most was that while they were on prepaid meter, they often vended about N10,000 token monthly. But that has tripled after the AEDC operatives removed their meters for no fault of theirs.
“This is daylight robbery because I am sure that nothing went wrong with the meters as we have our vending records intact. Nobody bypassed the meter; and fortunately, they did not say it was tampered with,” he explained.
Another resident said he was handed a bill of N70,000 for just one month for his house after the AEDC officials removed the meters.
“That was very outrageous because I don’t consume up to N20, 000 a month while vending with the meter since we turn off appliances when we are not at home,” he said.
When contacted for a response on the complaints raised by electricity consumers in Abuja, the spokesman of the AEDC, Mr Oyebode Fadipe, said it was not true that they were exploiting consumers.
“What we have seen in some instances is that customers themselves complain that their meters are faulty. And when the meter is faulty, it means that it cannot function again. So we retrieve the meter and place the customer on capped billing, which is an NERC-guided billing methodology.
“In fact, it is not even profitable for us because we have seen instances where the capped billing is lower than their normal vending (with meter). So, it is now incumbent on us to make sure that we speedily replace the meter so that we can quickly close that gap,” he explained.
What the NERC said
The National Electricity Regulatory Commission (NERC), in a note on consumers’ rights and obligations, states that while customers have the obligation to pay their bills, it is part of their rights to dispute any bill (estimated) they feel is high.
The power sector regulator, in the document, stated that when such dispute ensues, the customer should pay the amount they paid previously before the new ‘disputed’ bill and seek the redress mechanism to address such complaint.
To tackle the issue of high estimated billing by the 11 DisCos, the NERC, in 2020 rolled out the capped estimated billing for the firms, specifying what consumers should pay in a given area under a DisCo, with respect to how much electricity they are expected to get per month. The customers’ tariffs are then classified as Band A (above 20-hour daily supply) up to Band E (about 4 hours daily).
Experts proffer solutions
Commenting on efforts by DisCos to improve their revenue collection, a power technical specialist at the Association of Nigerian Electricity Distributors (ANED), Akin Akinpelu, said that for the sake of national security, DisCos cannot disconnect military formation, even when they failed to pay settle their debts.
The ANED, through its executive director, Research and Advocacy, Sunday Oduntan, had a fortnight ago condemned the alleged beating up of four staff of the AEDC over attempts to recover debt for the electricity supplied to the premises of an army officer in Gwarinpa, Abuja.
Also speaking on the perennial revenue loss of the power firms, an accountant and public sector commentator, John Okibiyi, said providing active meters to all the customers remained the best solutions, which he said would reduce the physical contact between DisCos officials and customers, while ensuring that without payment, there will be no power supply.
“The downside to this is that more people, even with the meters, indulge in energy theft. So I think the power firms should work with the lawmakers and security enforcement agents to create stiffer penalties for all forms of energy theft.
“This will deter perpetrators while customers will be sure they are paying for what they consume through the use of meters,” Okibiyi said.
Speaking on the solutions to remedy the non-payment of energy bills by customers, an energy partner at Bloomfield Law Practice, Dr Ayodele Oni, argued that the government had a significant role to play.
He said, “The government should keep its promises around the Transmission Company of Nigeria (TCN) and grid enhancement; and the DisCos should be forced to perform. They (DisCos) should use technology, sub-franchising to reduce electricity theft while the government should force DisCos to meter all consumers.”
When our reporter reached out to the spokesmen of the Defence Headquarters, the Nigerian Army and the Nigerian Navy for their reactions on the status of electricity bills owed by the armed forces, the acting director, Defence Information, Air Commodore Wap Maigida, said he was not aware if the military was owing or not.
“I am not aware of that, but I will check,” Maigida simply said.
The spokesman of the Nigerian Army, Brigadier-General Onyema Nwachukwu, explained that he would find out from the Department of Logistics to know the situation.
“It is not something I can do instantly. I have to find out tomorrow (Friday) from the Logistics Department to know whether we are owing or not and get back to you,” Nwachukwu said.
Commodore Suleman Dahun, the spokesman of the Nigerian Navy, in a telephone conversation with Daily Trust Saturday, neither confirmed nor denied that they Navy were owing the DisCos.
He noted that even if the Navy was owing electricity bills, it should not be a matter of the media but between the two establishments.
Dahun said, “If we owe electricity bills, it is between us and the organisation. If somebody tells you that we owe, fine; is he supposed to go to the press or sort it out with us?”