E- Conference on Nigeria's Power Sector Reforms

Amid widespread reports of improvement in electricity supply across the country, the question on everybody’s lips is: “Are the power sector reforms yielding fruit already?”…"Will the improvement last, or is it merely induced by the high rainfall season which keeps Kainji and the Shiroro Dams generating output at optimum capacity?" …”How can citizens meaningfully engage, participate in, or support the power sector reform processes?”

Propelled by the many questions, commentaries, reports, and articles we have carefully collated, studied and analyzed, SPACES FOR CHANGE is convening an e-conference focusing on power sector reforms of the Nigerian government.  The e-conference’s lead discussant, Dr. Sam Amadi, Chairman of the National Electricity Regulatory Commission will interact directly with over 1,800 Nigerian citizens, at home and in the diaspora, on the Federal Government efforts towards achieving stable electricity supply, and a significant turn-around in the nation’s power sector.

The e-conference proceedings will provide an advocacy tool for sensitizing the public on the latest developments in the sector, and to mobilize public engagement and participation in the reform processes. Our array of online and offline portals will provide additional platforms for amplifying the e-conference outcomes.

Date: Saturday, August 18, 2012

Time: 4-6 p. m.

Venue: Spaces for Change's DISCUSSION ROOM

     
 ...Eagerly Awaiting to Participate in the E-Conference 

Ahead of the forthcoming e-conference, members of Spaces for Change DISCUSSION ROOM are already firing questions at the NERC Chairman, with strong expectations to receive very satisfactory answers to their range of concerns. Here are some of the questions:

Kunle Rotimi To what extent has the National Electricity Regulatory Commission (NERC) prepared to enhance the productive and executive capacities of key personnel in the power sector to sustain the perceived improvement? What are the plans of the managers of the power sector reforms to galvanize the public support in paying electricity bills regularly and preventing illegal connections by some people?

Chidozie Oguanyia I learned that consumers are not meant to pay for prepaid meters. If it is true, what is the fate of those (I am one of them) that paid up through draft (min. #25,000.00) over a year ago but was neither supplied (meter) nor refunded?

Usman Bala Mohammed Those who do not have meters and are being charged for fixed lines. These charges are quite indiscriminately done. People even fear that when they get to be issued a meter, the debit of the bills charged in the fixed lines will be different from what was actually consumed.

Why are we not paying for “pay as you use”? For instance, if your fixed line charge is 4000Naira for the month of June, suddenly for the month of July its 15000Naira, and then that of August is N18000.  How do you reconcile these charges when a meter is issued, since we are told that the meter will be extracting all the charges consumed by your previous bills?

Usman Bala Mohammed Prepaid Meters are still being paid for through a bank draft.  Yet, we were told it should be free. Why?

Penshd Ibiminji Darego What attitudinal change do you think Nigerians must begin to have to enable the country continue on its steady path to steadier power/electricity supply?

2) The present realities aren’t anywhere near what is needed, and cannot sustain any reasonable development in the country. What are the immediate and future plans of the government to boost power supply?

3) The Minister of Power has released power generating figures. How can this be sustained and improved on in the long run? And what assurances do we have that the government will sit on top of the power situation for the good of the masses long after selling of PHCN?

Favour Babatope Afolabi Kindly provide us with the following information:

1. What's the ratio of power generated via hydro/gas powered plants today and how do you suppose that would change as the Power Holding Company of Nigeria firms are privatized?

2. What marked improvements should we expect over the next 12, 24, 36 months in terms of Megawatts based on the ongoing reforms and expected contributions within the sector by the newer investors?

3. What is the official estimate on the power output Nigeria needs to generate today to satisfy both residential and commercial usage?

Pamela Braide ‎ My questions are about the time frame for improvement? What are the scheduled bill increases and end user behaviour to promote Energy Efficiency (EE)?  I am aware of the current standards and appliance labeling frameworks and efforts being set towards achieving EE and believe it is an important and overdue way to engage citizenry in being proactive. I am also concerned about the communication strategy of the changes.

What is the plan for low density, low income areas post privatization which may not be financially viable for private power companies? Busy cities and industrial hubs aside, in what ways will rural areas, poor urban or peri urban or geographically challenged areas be served? Are states mandated to serve the gap or is it optional?

Alero Mobola Adollo: My simple question is: why do we have a marked improvement in certain areas but a regression in others?

Sam Kunle Oyelude While I am potently optimistic that the reforms in the power sector will inadvertently yield positive results,  time-frame is another matter entirely. Please educate us in the metering dichotomy: why do we have the prepaid digital meters alongside the 'free' regular digital meters?

Ify Okoye What is the government’s effort in tackling the energy losses through illegal connections? What mechanism has been put in place to checkmate some of these developers who connive with PHCN officials to use refurbished transformers in their estates?

Kunle Rotimi Is it not feasible to pay electricity bills through e-transact or scratch cards, so that individual or corporate consumers will not have to pay cash to PHCN officials, but rather make e-payments directly into centralized accounts for transparency sake?

Olasunkanmi Olapeju May I ask that you explain the basis for stratifying residential land uses into densities, which I believe would determine the peculiar ratings for households whose power consumption will be subsidized in the first four years of the privatization regime. How will rich households located in rural communities or cities' peripheries, for instance, or viceversa, be assessed? How will the economic status of households be measured? And because we don't have structured land use zoning systems in many of our settlements, how would classification for ratings be done in urban areas that are characterized by mixed land uses and densities? We need to fully understand how these things will work in other for us not to be short-changed by electricity carriers. We also need to have a clearer perspective on how to plan for our future expenditures.

RESPONDING: Sam Amadi:  First, meter maintenance is abolished. I am not aware that it is still being charged. Anyone who charges MMF should be reported to Economic and Financial Crimes Commission (EFCC) and NERC. Most customers are not required to pay fixed charges and energy charges. Fixed charge is a monthly charge to remain on the network. It applies to all utilities across the world. It is the pricing methodology to recover fixed costs. For most residential consumers it is N500 naira monthly, less than the cost of recharging MTN card.

Kalu Akaraka Friday  Did you say less than the cost of MTN recharge card? It is clear that PHCN’s idea of prepaid is different from what MTN and others use. MTN’s prepaid services has no fixed charges, except for promotional sales, in which users are encouraged to spend more but the net effect is that the call rates are dropped for such user.

Lugard Ekhator ‎The fixed charge that is being charged by PHCN is too exorbitant. I remember seeing one of our residential locations in Yola reading 90 something thousand naira for fix charge alone. Haba!

Victoria Ibezim-Ohaeri I am aware the low water levels at the dams significantly affects the generation of commercial power mainly because of lack of rainfall in different parts of the country, especially the North. Recently, I have heard people say power supply has improved. But in my experience, some level of power stability is witnessed at this time every year. That inspires the belief that the reported increase may be linked to the high seasonal rainfall. So a better way to assess performance is to compare the frequency of electricity supply during the rainy and the dry seasons.

Bunmi Divinewealth Awoyemi I can testify to the fact that for the first time in 7 years, power supply has improved exponentially in the last 21 days in Lagos and Abuja. I believe that we are enjoying the benefits of handing over transmission of power to a Canadian firm called Manitoba Hydro International. Manitoba has signed a management contract with the Federal Government for the management of the transmission company of Nigeria. We must NOT celebrate yet until we see consistency in the implementation of the power reform agenda of Goodluck Jonathan. The BPE must now go ahead to handover the Discos and Gencos to investors with the pedigree and resources to transform generation and distribution of power in Nigeria. If these reforms are implemented to the letter, generator manufacturers/traders, petrol and diesel traders will need to look for something more productive to engage in, because it will take a toll on their gargantuan profit margins

Fred Aghanenu:

1) When a transformer is faulty, consumers in the affected area are subjected to contribute funds to PHCN officials to either effect repairs or replace the transformer. My question therefore is, under the new dispensation, would consumers continue to pay for the repair of PHCN equipment? If not, would you designate consumer complaint centres where complaints will be lodged.

2) In a situation where there is power outage due to faulty transformer, would consumers continue to pay the fixed charge of N500 while the outage lasts also bearing in mind that most consumers in the rural areas consume less than N500 per month?

3) Most consumers do not have billing meters due to scarcity of meter and or exorbitant cost of acquiring one. Thus they are billed by estimate which is usually higher than the normal cost. Question: What is the cost of a new meter and is it available?

Mary Oyibocha Agbajoh I don't subscribe to Nigerians shifting blames on President Jonathan on every issue when they are so intimidated by common PHCH staff who demand for bills without issuing meters. Citizens should exercise their rights and demand for the means for billing you without meter. I think PHCN staff are fraudulent and taking advantage of your citizens’ ignorance.

Pamela Braide What are the challenges to reaching power generation targets and how are they being addressed? The Power Sector Reform Roadmap launched by the Presidency set the following generation targets: December 2011 - 9,767; December 2012 - 11,879 and December 2013 - 14,218. What are the revised targets and dates Nigerians should hope for? Thanks for joining us.

Top of Form

More questions collated on Thursday, August 16, 2012:

Ify Okoye: 1. Has the new tariff structure taken off? If yes, please can you analyze the current payment structure? For example, what are those incidental charges and what is NERC doing to subsidize the high tariff for the low income electricity consumers?

      2.  What is the yardstick for measuring low income consumers?

     3.  What is the objective of MYTO (multiple year tariff order) and how does the concept relate to the free provision of meters for electric users especially the poor?

    4.   It is a known fact that the installed capacity for the transmission lines is about 5000/5500mw though the actual capability is not up to that. What is the government’s future plan about increasing this capacity?

    5.   Does NERC have anything against concessioning out fault clearing? If no, then why is the government not thinking in that direction because faults ought to be cleared within 2hrs; but in Nigeria, it is not so.

     6.  It is a known fact there is low level distribution of infrastructure which leads to constant overloading of transformers and distribution lines. What is NERC doing as regards strict compliance with power policies (the overloading of the distribution infrastructures?

     7.   Is it true that the $23m (approximate) upfront payment to Manitoba International was borrowed from banks? If so, why is it difficult for the government to pay off the PHCN workers according to their service condition?

    Clarence Briand I am a Canadian, and I am familiar with the work of Manitoba. Manitoba Hydro is the Crown Corporation responsible for electrical generation and transmission across a territory twice the size of Nigeria under the most extreme conditions, temps of -40°C to 40°C, and has a stellar record nonetheless. Good luck to them in Nigeria.

The following are other projects contracted by Manitoba Hydro International (MHI) in Nigeria. Has there been an independent evaluation done on these? Answers might shed a light on what to expect.

        - National Electric Power Authority (NEPA)

Training Program
- Utility Management Services for the National Electric Power Authority (NEPA)
- Implementation of Pre-paid Metering Systems
- Technical Assessment - Hydroelectric Project for Tiga & Challawa Dams

Clarence Briand Here is MHI's perspective on their previous work in Nigeria.  Projects | Manitoba HydroInternational ALSO, MHI is a subsidiary of the Crown corporation: Manitoba Hydro. Its goals and objectives are not necessarily the same as the parent company who provides electricity to the citizens of Manitoba. This is worth pursuing. 

Kalu Akaraka Friday Let's do a small calculation, if the electric power company charges N500 as fixed charge, what it means is that 'PHCN' wants guarantee, that in the event they are unable to supply for a month, you are still obligated to pay them the fixed charges. The question is what would motivate a business man, in this case PHCN, to make effort to supply me when I still have to pay them, even without being supplied in first place? 

Dr. Sam Amadi has said that N500 is small and in fact, that is less than MTN recharge card. Well, we are talking of millions households. If for instance, there are 8 persons per household, that is 20M households based on 160M population. If 50% has access to electricity, that is 10M households across the country. Multiply 10M by N500, you would get N5B for not doing anything at all. As he mentioned that it's a standard practice elsewhere, even if it is true, what he did not mention is the fact that, in those countries, the supply of electricity is not taken for granted. Perhaps, its nearly impossible to see a situation when a household will not have electricity for a whole month which is not the case here.

Therefore, two things can be seen here, one, N500 is simply too much for anyone to pay as fixed charge. In fact it should not be more than N100. Two, such fixed charge should be built into one's consumption bill so that in the event I wasn't supplied, then I don't pay a dime. That's the way it ought to be.

Fred Aghanenu A review of my PHCN June 2012 bill revealed unit cost of N11 while fixed charge was N300; but in July, unit cost and fixed charge increased to N12.82 and N500 respectively. What is the basis of the increased tariff? And are consumers not being unduly shortchanged by these increases?

                   JOIN THE DISCUSSIONS….TODAY!!!

Here’s a peep into Dr. Sam Amadi’s profile:

 Ph.D., 2004, Ethics, Religion and Conflict, Human Rights, Political Philosophy Jurisprudence, and Legal Theory - Harvard Law School, Cambridge, Massachusetts. M.P.A.,

2003, Political Economy and Public Sector Reform, Kennedy School of Government, Harvard, Cambridge, Massachusetts.

 LL.M., 2001, Human Rights, Jurisprudence, Alternative Dispute Resolution, International Law, and Administrative Law, Harvard Law School, Cambridge, Massachusetts.

B.L., 1993, General Legal Practice and Professional Ethics, Nigeria Law School, Nigeria.

LL.B., 1992, Constitutional Law, Human Rights, Contract law, International Law and Company Law, etc., University of Calabar, Nigeria .