A Review of the Nigerian Energy Industry

Estimated billings: Govt to compel DISCOs to deploy metres —Nebo

23 January 2015, Lagos – The Federal Government has said it plans to compel electricity distribution companies (Discos) to deploy metres to Nigerians, to address the issue of estimated billings.

Chinedu Nebo
Prof. Nebo (Photo: Vanguard)

Speaking during a visit to Vanguard, Prof. Chinedu Nebo, Minister of Power, lamented the fact that most of the electricity distribution companies have refused to deploy metres to Nigerians, a situation leading to exploitation of electricity consumers across the country.

To this end, Nebo disclosed that the Federal Government has concluded plans to deploy about one million metres to alleviate the plight of Nigerians as regards estimated and outrageous billing.

He lamented the constant vandalisation of gas pipelines, noting however, that the situation was now under control, as generation capacity has risen to above 4,000 megawatts, Nigeria’s highest capacity till date.

“Vandalism has become one of the biggest challenges faced in the energy industry in general, with attendant colossal losses running into millions of dollars in terms of crude oil and gas production as well as power generation shortages,” he said.

Nebo explained that the government had to take this bold step, as this was now the only way to safeguard infrastructure in Nigeria.

Increase in tariffs on imported metres

He also stated that the Federal Government plans to increase tariffs on imported meters to compel DISCOs to patronise local metre manufacturers.

He said: “We went round the country to take inventory of electricity usage in Nigeria without letting the power companies know. It was what we discovered after the inventory that made us decide to buy and deploy one million metres to Nigerians.

“We are also trying to mop up metres from Nigerian companies which produce metres so that these metres can be distributed to consumers and possibly help address the issue of estimated billings and reduce commercial losses of the power companies.”

Estimated billings

On the estimated billing by distribution companies vis-a-vis their commercial losses, he said: “We cut back technical losses substantially. Unfortunately it is not so with commercial losses. More than 50 per cent of Nigerians are not metered. Some who are metered circumvent the metres and do connections that are illegal. Also, many people are not paying their energy bills.

“Many people are using electricity without the knowledge of the electricity companies. And that is why some of these companies reported a colossal loss of over 50 percent, some of them even 55 per cent.

“So who pays if there is a tariff adjustment? So at the end of the day, it is those who pay that are forced to pay more. This is because it is those who you see that you will get your money from.”

He, however, disclosed that “the companies are committed to reducing commercial losses gradually, and NERC is working hard to hold them to their promise because it is part of their business plan.

“But until people are metered and metering becomes prevalent all over the country, commercial losses therefore reduce substantially, distribution companies are going to find it difficult to pay for the electricity they consume. This is because it is like putting money in a pocket with holes.”

Generating capacity to increase by 4,000 mw

He further stated that Nigeria’s power generating capacity will increase by about 4,000 megawatts by the end of 2015, as the National Integrated Power Projects, NIPPs, will be ready for commissioning by the end of the year.

He said: “The initial challenge the NIPP encountered was that at inception, when the NIPP was conceived, there were no concomitant plans for gas supply to the power plants. It is the present administration that made sure the infrastructure to deliver gas to them was put in place.

“We are glad that today, the infrastructure has been put in place. We are also working hard to ensure that gas is available to supply all the plants.”

Govt earmarks $3.3bn for transmission, hydro

Nebo further stated that the Federal Government had mapped out about $3.3 billion of the proceeds from the sale of the National Integrated Power Plants, NIPPs, for the development of transmission and hydro power sector.

He explained that for more than 30 years, transmission infrastructure in the country was neglected, which resulted in the rot seen in the power sector.

He said: “For more than 30 years, transmission infrastructure in the country were aged, over used, over loaded and out dated. That is why the Federal Government decided to deploy $1.7 billion of the proceeds of sale the NIPPs to hydro power generation and $1.6 billion to transmission.”

The minister also said the NIPPs are on course as two of them, Geregu 2 and Omotosho, have been commissioned by President Goodluck Jonathan, adding: “They are expected to add more than 4,500 megawatts of electricity to the national grid by the time they are commissioned.”

As regards rural electrification, he said more than 1,000 electrification projects were being revived.

Govt not helpless in combating pipeline vandalism

Nebo also stated that the Federal Government was working hard to combat pipeline vandalism through digital surveillance systems.

According to him, it is not as if government is helpless with the situation but that it requires huge capital investment to deploy digital technology in monitoring the gas pipelines from vandals.

He said: “The government is not helpless in combating pipeline vandalism. The problem is that we have not fully deployed digital system of surveillance. It is very expensive but you must put in a surveillance system that is 100 per cent digital, so that wherever you are, if there is any slight tampering or even touching of the line, it tells you when it is happening and exactly where it is happening.

“It is not a matter of what we are doing now when if a hole is punched in a line, we will spend the whole day looking for it. But this technology costs hundreds of millions of dollars and the president has already started doing something on that to make sure we stop vandalism.”


– Vanguard

In this article

Join the Conversation