The Score Card OF the Power Sector Since Privatisation About 10 Years Ago In Brief
With less than one week to mark the 10th years anniversary of the privatization of the electricity sector, it is now necessary to take a look at the scorecard of the sector in brief. Though not all the things that have transpired since the time of the privatization exercise are mentioned here, but few ones that are very germane will be touched on. These few ones would centre on investments in generations, distribution, and transmission
The Review of the Power Sector Privatisation Exercise that stakeholders have advocated for is a Regulatory requirement/ oversight which is different from Seminars workshops & Conferences ( Talk Shop ) setting)
Every Year, the Nigerian Government is paid heavily by Investors at the Upstream for Concessionary Fees for Concession of Generation of Upstream Generation Sub Sector of the Nigerian Electricity Supply Industry
The term Concession means that the Government desires to give out Legacy Generation Power Plants for a Period of 5 Years as Originally designed ( 2013 – 2018 ) and renewable by an additional 5 Years ( 2018 – 2023 ).
THE ISSUES AT STAKE
- Original Equity Stake holding of the Power Sector Privatisation Exercise was structured along 40% to Private Sector/ Private Investors .40% Equity Stake holding to the Federal Government of Nigeria .20% Equity Stake holding to Organised Labour/ Public Servant/ Members of the Public ( Open to Workers and Nigerians to Subscribe to Shares ) The Equity Stake holding implies or entails that 100% of the Equity Stake holding would be Publicly Quoted/Publicly Listed Stocks on the Floor of the Nigerian Capital Market / Quoted on the floor of the Stock Exchange ..
That is why before now, we used to have Utility Companies like Abuja Electricity Distribution PLC Port Harcourt Electricity Distribution PLC ,EKO Electricity Distribution PLC,Ikeja Electricity Distribution PLC amongst others. They carry the name PLC ( Public Liability Company ( PLC )
The question is how many of the distribution and generation companies operating in Nigeria are duly quoted or formally listed on the floor of the Nigerian Capital Market / Nigerian Stock Exchange ( NSE ) with shares subscribed to as publicly qouted business entitles and Shares openly traded
The few individuals who have control of monopoly of shares and control the board room decisions of the generation and distribution entitles, what is the spread of their equity stakeholding/ Shares?
Have we not moved from a public sector-driven monopoly to a private sector monopoly where a supposedly publicly quoted utility company is being owned by one man or just one-man show who smartly spreads the individual’s ownership into proxies or point man shareholders that are represented in disguise yet it is the same one-man show who cut the short by proxies.
The privatisation exercise in its original form was designed to promote market competition and competitiveness and not to promote market monopoly as obtained today in the post privatisation era in the electricity market..
As it is today, can the Nigerian Government/ Nigerians beat their chest that the post-privatisation era from 2013 – – 2023 has promoted in any way market competition or has it created a competitive electricity market?
The answer is no. 1. The privatisation exercise instead of creating a competitive electricity market has succeeded in entrenching private sector’s driven market monopoly where we have a single seller/ and single buyers market structure with every negative consequence of a market monopoly.
2.. Privatisation exercise was also designed to promote general efficiencies in the electricity Market.
Going the global benchmarks of market efficiencies, can we say this has been achieved within the past 10 years tenor of moratorium of operational licensees granted to generation and distribution licensees vis a vis the Power Sector Privatisation Exercise? The answer is No !!!
*Collection* *Efficiencies* :
Collection efficiencies in the post pivatisation era in the electricity sector have been very low in terms of benchmarks the distribution licensees have roundly failed to improving collection efficiencies.
The distribution licensees have failed in scaling up billing efficiencies and upscaling revenue efficiencies
*METERING*
The distribution licensees have failed woefully in terms of metering deployment and metering efficiencies as a tool for cost recovery, energy accountability, and customer satisfaction.
Since the privatization era, only 10% – 20% of Registered Customers have been metered and Distribution Licensees have failed in their promises to close the huge metering gaps from the inception of privatization till date …
Service Level Agreement and key Performance Indicators ( KPIS ).
Distribution licensees have failed to meet a critical component of what forms the nucleus of Vesting Contracts, Service Level Agreement, and Key Performance Indicators ( Performance Agreement ) all of which forms the basis of the contractual obligations between the Federal Government of Nigeria and the so-called investors.
Customer Centric and Customer Service
On customer service delivery benchmarks by the distribution licensees have failed roundly,
There has been an increasingly unacceptable poor quality of customer services between 2013 to 2023 being the 10 years tenor of the moratorium of the power sector privatisation exercise.
Within this period, Nigerians have experienced astronomical growth in Nationwide customers dissatisfaction
Lack of Accuracy of Customer Data and Uncertainty of Customer database
The customer data in the electricity sub-sector lacks accuracy of customers data. Several attempts to carry out customer enumeration and customer census were badly implemented and not well funded.
Investment in metering technology and upgrades in the deployment of metering platform technology have all been marred by failure..
In most places, there are still in place old metering platforms and metering software, and in such instances end users and customers have had difficulties in vending and accessing the metering landscape of the concerned distribution licensees. ….
This is largely due to poor quality of investment in the upgrade of obsolete legacy metering technology/ metering platforms to modern, robust and real-time in 21st-century emerging metering technology
Poorly Equipped Manpower
Investment in working tools by a lot of the distribution Licensees have been grossly inadequate and Utility Companies have failed to invest in Network Improvement, and majority of the distribution network Infrastructure has been those acquired from the legacy distribution system of the privatisation era.
Transformers are overloaded and networks in most cases are overstretched beyond measure and no meaningful investment in network upgrades before now, in the immediate and long term.
WORKING TOOLS
Working tools like operating rods are not provided, and workers are left with no other options than the manual use of dry sticks and manual crude measures where they are supposed to use operating rods.
No fuses in some of the Distribution Transformers,
Communities are being forced to buy materials for fuses in the form of aluminum copper wires while upriser cables are in most cases undersized upriser cables, undersized incomers cables, and undersized outer cables as a common feature. An average distribution sub-station in Nigeria is an eyesore and despicable.
REGULATORY ECOSYSTEM:
Lack of Regulatory monitoring of billing of Distribution Transformer’s Point load billing ( Telemetry )
Customers on Post Paid Meters are been billed outrageously and distribution licensees have refused to convert all maximum demand meters in use by bulk users of electricity to pre-paid meters MD Meters to save the end users customers of outrageous estimated billing inherent in billing of Post Paid.
ATC & C LOSSES
Aggregate of Technical, Collection, and Commercial Losses : ( ATC & C LOSSES): The promise by private sector investors to reduce ATC & C LOSSES has failed woefully between 2013 – till date ..Instead of a decrease in ATC & C Losses reverse has been the case.
Power Sector and Liquidity Challenges
The privatisation exercise was designed to increase the multiple income streams for the federal government of Nigeria, as the expected increase in revenue and income was said to be the long-term benefit of the government.
However, as against the increase in multiple income streams and revenue for the federal government of Nigeria Privatisation of the Electricity sector has succeeded in increasing public sector’s funding.
Federal Government has continued to invest in a bottomless pit of drain pipes and the electricity market has been skewed as a conduit pipe that evidently benefitted a few individuals at the expense of the Nigerian Government and citizenry.
Political Interference in Regulatory Ecosystem:
Regulatory Ecosystem: The regulatory institutions and regulatory ecosystem are politically heavily influenced and have found it extremely difficult to rise significantly above 3rd party influences / political interferences.
The resultant effect is near zero regulatory enforcement and an increase in regulatory risks, regulatory tootlessness, regulatory captured, regulatory subterfuge, and regulatory docility.
FULT TRACKING
Fault tracking and management of system protective equipment:
HSE Infraction, HSE / PPE
Basic as Auto reclosures, breakers, gang isolators, fault locators, safety tools like hand gloves, safety helmets, safety boots, safety belts, and personnel protective equipment ( PPE ) is largely inadequate and in some cases non-existent.
Poor Investment in generation Plants / Failure to retire some failed generators
Some legacy generation turbines are so obsolete and have continued to fail.
The generators are due for retirement due to a lack of funding and wear and tear. Governor, spinning reserves black start equipment are evidently inadequate.
Transmission Inadequacies:
Obsolescence of transmission grid network infrastructure, defective and obsolete system protection at different layers…
Lack of SCADA System
Leakages in the metering of different layers of cascading of electricity across the electricity value chain.
A dearth of reactors, relays, breakers,poor quality of system control, poor vegetation control and poor quality system-related frequency control management due to poor funding and the absence of requisite modern technology required in a modern grid automation system
By Kunle Olubiyo, Nigeria Consumer Protection Network President and Power Sector Perspectives Coordinator.
