Electricity industry of today is no longer a social service. It is tied to the economy. The essence of privatization is to boost development, improve efficiency, lower tariff with increase in competition. It seems however, that the country is still being weighed down by its long history and experience of government ownership of the past as opposed to the emerging realities of investor ownership of electric utility.
The association of power distribution companies has been bombarding its consumers with information on vandalization of natural gas infrastructure, shortage of gas supply and low power generation. The group believes it can hide under the ongoing political and economic challenges in the Niger Delta region to absolve itself and play the ostrich. Observers in the industry have noted that the discos are using every opportunity of power generation and transmission shortages to disguise their inability to make any meaningful impact on a higher quality of delivery to consumers. The discos have over the last two years utilized a business model that is full of avoidable flaws. With the existing flaws it is uncertain that even if power was available, they would have been able to operate optimally.
The discos do not have updated record of their customers including those with the old analogue and pre-paid meters. Those who paid for such meters are not all connected. Lately response to some of the enquiries is that the foreign exchange restrictions are inhibiting delivery of this component of the business. We have not heard that the local suppliers of energy meters are requesting them to pay in foreign currencies.
Another aspect that has not improved is their response to electrical faults. Most of the time, critical components are not available to support their effort. It is unclear if aluminium and copper conductors, high and low tension fuses are readily available for maintenance purposes. Distribution substations generally are begging for cleaning and unreasonably exposed to the public. After about four weeks of power outage, a neighbour had his distribution transformer replaced but the distribution cabinet (feeder pillar) connections were not attended to thereby causing additional outage. The reason was because of the unbalanced loading of the consumers. Of course it is the responsibility of the disco to correct such unbalance in order to minimize the consequent technical losses.
The level of decay in the distribution network is not new. The discos had the opportunity to do due diligence on the assets apart from other avenues that were available to them during the competitive bidding prior to the final award of contracts to the successful investors.
Summary of the Bureau of Public Enterprise (BPE) report on a power distribution company prior to the public sale had the following:
– The distribution network is old
– The distribution network is weak
– 33/11kV Distribution substations are overloaded
– Energy supply to the company from the grid is inadequate (The discos have had advance knowledge)
– Seventy percent (70%) of the network is undersized conductors at all levels (70mm²/35mm²) at 33kV, 11kV and 415V. Poor construction standards. Need to embark on massive re-conductoring.
– 2907 Feeder pillars (low voltage distribution cabinets), eighty percent (80%) of which must be changed.
– Many customers are not metered
– Inadequate technical staff
– Poor voltage profile characterizes most of the long distribution lines
Nigerian investors are no doubt witnessing a shift from the short/medium to a long term business interest with reference to electricity infrastructure. This paradigm is a marathon race as opposed to the erstwhile hundred meter dash. Those who are conversant with this development recognize the fact that billions of dollars at low cost would be needed to harness the tremendous and hidden treasure that would generate trillions of Naira in annual revenue.
The fact that initial payment for assets has been made and therefore the owners can sit back and harvest is a non-event in this industry. That supply is not coming from a particular source is not sufficient to sit back and wait for its return. Some discos are already in serious negotiations with suppliers of embedded power plants. Others are possibly considering outsourcing generation at the utilization voltages of 33kV and 11kV instead of going through the traditional 132kV or higher. These companies must get their systems planning and design units to start developing schemes including renewable energy resources that would increase supply and earn greater revenues.
The electricity regulator (NERC) has developed a hundred and twenty five page (125) document captioned “The Distribution Code for the Nigerian Electricity Distribution System”. It contains:
– Distribution planning and connection code
– Distribution operations code
– Distribution construction and maintenance code
– Data registration code
It is therefore important that the operators go through the procedures and practices and develop mechanisms to enhance the overall efficiency of their network. Presently, most networks are begging for improvement, overhaul and upgrading. Technical and non-technical losses are unreasonably high and the trend must be reversed if the owners are going to benefit from the project. Overall systems performance and efficiency are the hallmark of private sector driven utility.
Finally, one noticeable development is the supply and installation of “amorphous” pole mounted distribution transformers that are noticeable in some new network being carried out by the federal government sponsored NIPP project which the discos are inheriting. We need therefore to witness more network improvement practices.
Edward Ajagbe
