Power Sector Crisis: Unlocking “Win-Win” Strategy

The energy gap between Nigeria and the rest of the world is widening by the day and the crisis in the power sector has become so unusually disquieting and strangely disturbing.

Without doubt, the bottlenecks in the power sector with the occasioned shortages in power supply is indeed costing Nigeria a significant chunk of the Gross Domestic Product (GDP) annually, undermining sustainable economic growth, job creation and investments.

Conversely, the predicament of the sector has been strengthening poverty, subverting entrepreneurial stamina and undermining enterprising strategies of millions of Nigerians.
What then will it take to expand power generation and the financial capability of the operators in the overall interest of Nigerians? What will it take to ensure adequate supply of electricity to consumers; how do authorities ensure fair prices by the DISCOs to the consumers and at the same time guarantees sufficient profit to finance the activities of the distribution companies for efficient operations?
All these remain the bottom-line of the current crisis in the power sector and the solution to these challenges can only come from a ‘win-win’ strategy between the customers and the stakeholders.
 Tortuous Journey
Sixteen unsuccessful years of power sector reform has only produced power shortages, restricted access to electricity and dependence on biomass for fuel; in addition to wickedly destabilising small and medium scale enterprises (SMEs). The current power system has invariably proven unfit for supporting shared prosperity both for the customers and the distribution companies (DISCOs).
Extreme Positions
Two extreme arguments have been advanced in favour and against the recent increment. While the first group (government and the DISCOs) posit that hike in tariffs remains the only measure to make investments attractive and allow the DISCOs remain in business, the customers and the labour unions insist the digital metering systems must be completed before any hike in electricity tariffs.
Just as the Minister of Power, Raji Fashola puts it, the price hike “is a painful pill that Nigerians must swallow…’’. But the big question is, shouldn’t Nigerians have right to swallow the pill on their own terms?
Does the cliché: Customer is king has any position in this great country? How logically defensible is it to have the poorest people (Africans) already paying arguably the world’s highest prices for energy, yet being pleaded to, to pay more.
Expectation of Nigerians is that, a government that rode to power on the proclivity for anti-corruption crusade should first to take a deep look into the past management of the power sector as the way forward.  It is an open secret that maladministration (as a result of political patronage and corruption) has been at the heart of the power’s crisis in the country.
Reasons for Consumers Anger
For this and many other reasons, Nigerians have every right to reject the so-called ‘bitter pill’.
For instance, South Korea spent $12 billion (N2.36 trillion) to provide 45,000 megawatts-hour of electricity, while Nigeria has spent over $16 billion (N3.14 trillion) to procure just about 4,000 megawatts!
Though, South Africa has very limited natural gas resources, with population of about 52.98 million (2013) and do not claim to be the giant of Africa or the biggest economy in the continent, it had in 2014, electricity production of 252.6 Terawatt-hours, a change of -1.4 per cent from 2013 and equivalent to 1.1 per cent of the world total according to the 2015 BP Statistical Energy Survey. Spain’s total electricity net consumption is 277.8 Terawatt-hours with just a population of around 47 million.
In 2011, a major European engineering firm estimated that demand for electricity in Nigeria was around 33 terawatt hours and will rise to between 56 and 95 terawatt hours by 2020.
The report ultimately makes a dent of our collective conscience, for it can only be insensitive to cash in on the plight of millions of Nigeria to further the interest of the self-regarding policies.
It is really upsetting to discover Nigeria currently has a total installed capacity of 10,396 Megawatt-hours and available capacity of 6,056 Megawatt-hours with only 5000 Megawatt-hours record peak in 2015. Will it not be prejudicial then, to describe those who see the price hike as another charade as irrational?
How then do you pacify and convince a man who is aware his country has exported 89 billion US dollars worth of petroleum since 2013 but harbours about 93 million countrymen with no access to electricity, that the price hike is the way out of darkness?
In a nation where more than 80 per cent of primary schools have no electricity and more than half of the population relies on solid biomass, the only option for the government is to do more rather than pleading to citizens for an increment.
 Available Options
The only logical thing for the authorities will be to put the power sector in order rather than transfer the cost of ineptitude and ‘miscarriage’ to the hapless customers.
In a country where demand for electricity critically exceeds supply, reservation on the efficacy of the proposed ‘painful pill’ is bound to rife and may be justified. Will this guarantee satisfactory supply of electricity? One is tempted to ask.
 The Middle Course
The above facts notwithstanding, on the one hand, the major stakeholders in the power sector, (Gross Domestic Product (GDP) and the government) must ensure adequate power supply to consumers, with fair and equitable tariffs; and on the other hand, the price charged must also be sufficient enough to allow the DISCOs to finance their activities and allow for reasonable earnings for efficient operations.
What would be unreasonable is to expect the companies to operate at a lost and it is almost certain that, many Nigerians, including the DISCOs and the DISCOs are in agreement with this.
The Divergence
Where then is the disagreement situated? The only area of divergence arises from what constitutes fair price or fair tariff to customers who do not have access to power and still get estimated bills that can only be described as excessive (crazy) bills.
Over the years, hapless Nigerians have been cruelly exploited by the power sector operatives. Hence, power consumers have become so sceptical of the minister’s assurance the present darkness would soon be replaced with stable light, when they will no longer have to generate their own power.
They also could not reconcile why they will have to continue paying excessive bills for months to come before the much expected stable power is attained.
Nigerians still need to be assured that they will not have to procure electricity facilities like poles and transformers in their community and still part with their hard-earned resources to service excessive bills or estimated tariffs.
Will the hike in price prevents DISCO workers from terrorising the customers who refuses to pay for power they did not get or use? Is it fair for DISCO officials to keep issuing estimated bills for customers who have, for the past two years, paid or applied for digital/pre-paid meter without being supplied? Questions as these just must be answered.
As someone who has been on pre-paid meter for more than two years, I know for a fact that pre-paid metering is the way forward.
Curbing DISCO Excesses
The practice of estimated billing system which gives the DISCOs the leeway to collect revenue for services not rendered or give customer excessive bills is one that must stop straightaway. This had led to the emergence of an electric power cartel that arbitrarily manipulates the billing system and disregard consumers rights and complaints of poor services arising from massive drop in capacity generation.
Even when a customer has a working post-paid metre, he/she is still issued estimated bills by DISCO officials who claim that the meter is outdated and its readings are no longer reliable. This is the same DISCO that could not supply a post-paid metre in spite of the fact that the costumer has paid for it for months.
The co-existence of the analogue with the digital metering systems as well as the estimated billing system is a complete abnormality in a sane society.
The disparities in the charges of the three systems are not only mindboggling and startling; they definitely do not reflect fairness, equity and justice. And of course, the minister, being a lawyer and a Senior Advocate knows this too well.
The solution therefore does not reside in the increase in tariff, which has inadvertently but mischievously replaced the obstinate fixed charges.
The core issue is how the government (minister), Gross Domestic Product (GDP) and other stakeholders in the power sector can assure Nigerians of adequate supply of electricity that is accompanied with fair and reasonable pricing system in an atmosphere where the customer is treated truly, as the king and the seller smiles to the bank with legitimate earnings that is devoid of consumers’ exploitation.
There is no gainsaying the fact that such situation will only come by if and when government takes responsibility for the failure of the previous regimes just as it would have loved to identify with their successes.

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