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Eligibility customer policy will strenghten power sector – Kola Balogun

The electricity Distribution Companies (Discos) recently threatened to declare force majeure. What do you think about this? Discos does not need to declare any force…

The electricity Distribution Companies (Discos) recently threatened to declare force majeure. What do you think about this?

Discos does not need to declare any force majeure on electricity distribution in the country. What government has done on eligibility customer scheme is meant for the development of the sector.

It is an open business platform that would aid the development of the power sector which I think it does not require any force majeure, it is even meant to brighten the future of the power sector.

What is your intervention to assist Discos in metering their electricity customers?

Well, it has dawned on us now that the issue of policy funding is a clear understanding of every player in the sector and I believe very soon, the government will inject some funds into the sector to drive metering, extremely to ease the entire consumers’ pressure and at the same time enhance collection efficiency on the part of the Discos.

The distribution companies are now ready to patronize local manufacturers but the funding is the major challenge which I think very soon, that would be things of past. It is now left for we, the local manufacturers to sit down and agree on the best way to deploy the meters and at the same time ensure that the meters comply to a certain level of standard and perhaps, we should have a narrow type of meter requirements not an open ended type of meters we have now.

If we have uniform meters that are being used in the sector, it would help development. What I am saying is that the Mojek meters, MOMAN’s meters, Sabroad meters, Unistar meters, all of us should look very similar in such a way that we can exchange parts, such that all those parts can be produced by another company if truly we want to develop the industry. So, the regulator or agency that is mandated for standardization still needs to come back to all the manufacturers, call them together and ensure that they have uniform meters so that each of the disco can say okay, the meters we are using in Nigeria is like this, not that every dick and harry just bring every shape or kind of meters into the country. Such things will definitely not help the development and also we should also produce a meter that would be able to address the technical and commercial losses of KPI yardstick for the discos so that we will have a minimum leakage in all the networks.

How standard are your meters?

The meters are all standard. You know why I said so? I said so because there is a body called NEMSA in the country whose responsibility is to regulate standardization of meters and every meter supposed to pass through the agency before it goes to consumer’s premises.

Many of the Discos still have so much confidence in foreign meters. What do you think could be responsible for this?

Well, for Discos to believe in the foreign type of meters, it is all about mindset that the foreign meters are better than local meters, which to me is not true. Because it is the same technology, the same thinking, it is the same components we all sourced from different parts of the world. So in terms of quality, Nigerian meters might even be better than Chinese meters. Secondly, the incentive given by the Chinese government to ensure that all manufacturing factories in China are export-based is so huge that our government needs to wake up and see that exporting is like a competition by all the countries, that we must encourage every domestic industry to produce for the domestic need and at the same time, export.

For domestic meters, we are very good. We design it for the country and it is our own brand and we don’t use any foreign brand other than buying raw materials. Some of the raw materials can even be produced locally because it can’t be one man business all through. Somebody must be ready to produce the raw material for us to buy locally. That’s why I have been advocating for uniformity in the way Nigerian meters look like.

What is the capacity of your brand here?

Our capacity today, if well-funded, is more than 30,000 meters every month and we have never utilized that capacity ever since. Capacity optimization is a reflection of funding because if you want to optimise your capacity, you must have sufficient raw materials to be able to drag your capacity. But, in a situation whereby you don’t have sufficient fund to drag your capacity, then you will be producing under capacity. So we’ve been producing under capacity since resumption basically because of insufficient funding. Within a month, we produce like 5,000 because we don’t have sufficient money for raw materials. We have not been given priority in terms of the Central Bank of Nigeria (CBN) foreign exchange allocation and these are things that we are facing. We have been  borrowing money at the commercial rate and this is very high for us to be able to have a breakable price.

What is the level of  Discos’ patronage

In fact, for Discos patronage, I think the dynamics are changing. They want to patronize local ones but still ball-down to funding because most of them supposed to fund us 100 per cent but they could not fund us 100 per cent. We are already signing an agreement with some of them and the patronage is encouraging now. We need funding because there is a bit of liquidity gap in between the transactions.

Government is concerned about metering. Do local meter manufacturers have the capacity to meet the demands?

In terms of capacity to deploy meters into the demand requirement in the country, I can say categorically that we have sufficient capacity. I keep saying this; it is just the planning that’s defective because there are two things that are required in deployments of meters in the country. One is the meter itself; the second one is the installation. The capacity for the production must be proportion to require manpower that would install the meters in all the premises of the consumers. The consumers are not linear, they are scattered and for your installer to install 10 meters a day, it is not even possible for one person since it is not linear because the house is not in a place, you will see one house here, another one would be 2, 3, 4, 5 km away. So the logistics of going to all the areas that requires metering is huge. We need enough manpower to be able to install meter efficiently and effectively and we need a good installation skill for us to be able to meter adequately because remember any bad meter installed in a consumer’s premises will eventually increase their 80 C & C loses into the network and this is what we want to reduce and that is why all the manpower must be well and adequately trained for them to do proper installation into the consumer’s premises.

What is the level of your employment in the meter manufacturing sub-sector?

I should be able to speak for myself. I don’t have the clear-cut statistics of other manufacturers but from my own factory, no matter how low the number of meters we are producing, at any point in time, we keep 300 staff fixed, beside the casual workers and if we are at the peak, you can be rest assured that the capacity would be doubled. We should be having between 600 and 700 staff while also engaging other people in the informal sector around the factory. This, to me   would further reduce the pressure of unemployment in the system.

Are there benefits from patronizing locally made meters?

The only advantage in patronizing Nigerian made meters is that we will no longer have a dustbin of meter in our scrap yard any longer. Any meter produced in Nigeria can be repaired and recalibrated and put back to the network. Secondly, we have various sensitivity, peculiarity of Nigerian that is being addressed from Nigerian produce meter. One, it is stamper proof, it is smart, it is intelligent enough to be able to address any form of leakages in the network and also what we have produced now is a dual tariff concept. A dual tariff meter that can take two sources of generation into one single meter; it means we are already designing meter to suit the open eligibility concept that is, if somebody is producing from one source and discos are producing another source, the meters can charge different tariff on different sources which is something that is peculiar to Nigeria and we have designed a meter to address that. Those are the good things in patronizing local manufacturers because we can always change the dynamics of what is peculiar to us. Anybody buying foreign meter, to repair is a problem. You can’t repair because you need to call the manufacturer in china or any other countries who would listen to you. Remember, you have paid them 100 per cent before delivery.

What the government should do is that any foreign company who wants to sell any product to Nigeria should come and set up its factory here, this is the standard in Kenya. 

Now that the Credited Advance Payment for Metering Initiative (CAPMI)  has been suspended by NERC, can you proffer other options?

No, NERC is  bringing the scheme back. The Credited Advance Payment for Metering Initiative (CAPMI)  is coming back and we are waiting for the framework. CAPMI will allow even deployment of meters. It will make the meter distribution more efficient and it will improve the entire metering deployment on the consumers. We expect the new framework which is expected to be roll out soon, to correct errors recorded in the past on the implementation of the scheme. They should bring back the new skill and I think the Minister of Power, Works and Housing has agreed that CAPMI should be re-introduced and I  think, the regulators are working on the framework. Re-introduction of CAPMI will, no doubt, increase  patronage on our own part as well as eases the tension on the consumer side too.    

 

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