Fixed charges on electricity inevitable — IBEDC CEO

20 December 2015, Lagos – John Donnachie is the Managing Director/ Chief Executive Officer of Ibadan Electricity Distribution Company. In this interview, he spoke on the metering scheme and prevailing challenges in the power sector, among others

*Electricity.

*Electricity.

How has the IBEDC fared in the era of privatisation?

It has been quite an experience in the past two years since the transition from public sector to private sector. The transition from government ownership to private ownership has been challenging because when the IBEDC came on board, it had to inherit both assets and liabilities from the defunct Power Holding Company of Nigeria. For a private company that inherited a power sector with dilapidated structure, equipment and network, it is definitely going to require lots of funding and time for it to meet the expectations of customers.

So, the company has been working to ensure that what had been neglected for many years are restructured and rehabilitated to deliver optimum services to customers in all our franchise area. IBEDC covers Oyo (Ibadan), Osun, Kwara and Ogun, and part of Ekiti and Niger. So, with this wide coverage, every region has its peculiarity which we always tackle in different ways. As part of our restructuring and their peculiarities, IBEDC deemed it fit to ensure each region has Regional Managers who oversee the affairs of each region for effective service delivery. The Regional Managers are in two different parts as we have the Regional Technical Manager who sees to the technical operations while the Regional Commercial Manager sees to the commercial aspect of the business.

Despite the private sector ownership of the business, Nigerians say power supply has not significantly improved. Why is this so?

There have been changes in our services compared to the past. The IBEDC has been able to deliver to its esteemed customers. This is a private company that just clocked two years and inherited a power sector which has obsolete equipment. With what we met on the ground, we have been able to improve our services while plans are on top gear to ensure that lasting solution is found to all the challenges.

However, this is a teething period which we all have to endure for some time. So, definitely we have been improving our services. As our allocation increases, our supply improves too, though it might not be up to the expectation of our customers. Still, we want our customers to understand that the power sector is in three different phases: generation (that generates the energy and we buy from them); transmission (that transmits and allocates the energy we are to distribute to our customers.); and we are the distribution company known to all the people (we are to supply the energy according to the megawatts allocated to us).

 

Despite all the challenges, we ensure that we give quality services to our customers. Most of our downturns are not always from our end. Our customers should understand that if there are faults or a maintenance process going on at the transmission company, there will be outages. Again, if there are technical faults, we will need to rectify such considering the status of our existing equipment and network .Therefore, we always implore our customers to report any fault to us.

Cases of energy theft have continued in Nigeria even after privatisation. Don’t you think that lowering amounts on electricity bills will discourage the occurrence?

This is one of the challenges we have been experiencing in the IBEDC; a lot of customers have been caught engaging in energy theft in form of illegal connection, by- passing of metres, and general vandalism, among other energy-related offences. These are contributing to our technical and commercial losses.

These have been the attitude of some customers over time and we have been able to apprehend some culprits whom we have handed over to Nigerian Civil Defence Corps, the Nigeria Police Force and other law enforcement agencies who are also stakeholders in our business. We have various media reports on such people.

 

So, the issue right now is not about the tariff charged the customers but the long-time attitude needs to be addressed. From available records, you will realise that those who are caught did not just start by-passing or engaging in illegal connection just two years ago but these have been their way of life.

We realise that some people will go as far as by-passing their meters in order not to pay for the actual energy consumed, and the IBEDC as a company will lose such energy that is supposed to be paid for. So it is obvious that it is a societal problem, not a result of the bills issued to the customers.

Will you say your company is overwhelmed by this act of vandalism given its persistency?

We are not overwhelmed because we engage various law enforcement agencies that are our stakeholders. The NSCDC personnel are meant to safeguard public infrastructure and we have been engaging them. So also, the police have been assisting in apprehending culprits while we have cases charged to court; the first offenders are fined and we have some of the stories in the media. We, on our own part, educate our customers to also be their brothers’ keepers by watching over the equipment in their communities to prevent vandalism among other energy-related illegalities.

Cases of estimated billing to consumers are still very high two years into the privatisation of operations. What are you doing to rectify this problem?

We are committed to metering our customers as a permanent solution to estimated billing complaints by customers. the IBEDC is planning to meter over 300,000 customers come 2016. That is why the IBEDC is appealing to all its customers to take advantage of the Credited Advanced Payment for Metering Implementation scheme introduced by the Nigerian Electricity Regulatory Commission as an intervention to bridge the huge metering gap across the country. The CAPMI scheme is a win-win situation for customers and IBEDC as customers shall be refunded their meter payments via electricity unit rebates over a period of 36 months with 12 per cent interest, while ensuring they only pay for what they use.

For customers with obsolete meters and no meters due to some faults or accidents in the past, what will be done by the IBEDC to ensure that all of these customers are properly metered?

Plans are in top gear to ensure a permanent solution. As part of our plans for 2016, the IBEDC has put in place the 10-year (2015 – 2024) metering plan and the total investment is estimated to be N47.18bn.

The rollout plan makes provision for over 80 per cent of our customers to be metered by the end of 2018. As at the time the IBEDC took over in November 2013, only 182,338 customers were metered while most of the meters had become obsolete or faulty and would need to be replaced to ensure quality service.

So, as from 2016 to 2024, the IBEDC has projected to meter over 300,000 customers annually inclusive of the CAPMI scheme. To bridge this metering gap immediately, a team headed by the Deputy Managing Director, IBEDC, Mr. John Ayodele just returned from China where they have been able to facilitate the supply of cost-efficient smart metres.

Also, as a company that is committed to serving her esteemed customers, IBEDC is currently embarking on a robust meter roll out scheme to cater for customers with unique challenges such as those who could prove that they are victims of burnt or stolen metres and customers who paid for meters under the defunct PHCN with evidence of payment. The initiative will also help eradicate estimated billing and energy loss faced by the IBEDC while at the same time serving as a support scheme to the CAPMI

Poor condition of transformers and electricity lines has been hindering adequate supply. But the IBEDC has been accused of not showing interest in getting these things replaced. What is your take?

The power sector is capital intensive; one cannot run a power firm without proper funding. It is part of the challenges we met on the ground which we are working on. Since inception, we have been able to provide some transformers to various communities across our franchise areas, but with our wide coverage, we realise that it is a gradual process and the effect and impact will take some time before it will be felt.

Also, we have some communities who need relief transformers due to expansion in the communities. We have some vandalised transformers which require replacement. That is why we always tell our customers to inform us whenever there is an expansion in their communities so we can know if the existing transformers can accommodate the load on it.

It is unfortunate that some communities go ahead to connect and when the load is too much for the transformer, it will become weak and develop faults before it packs up. In such cases, customers will be in blackout and still put the blame on us. But, if they had gone through the proper channel, they might not have suffered such problems.

 

 

  • Stanley Opara, Punch
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