FG Ploughs N 1.3 Trillion into Power Subsidy in 5 Years

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By Madonna Nwani


The federal Government has so far ploughed N1.3trn into electric power distribution subsidy to ease the burden on consumers for the past five years.

This was the submission of a national commission representing the National electricity Regulatory Commission, NERC, Emeka Onyegbule, at the stakeholders’ consultation on extraordinary review of the multiple year tariff order hosted by the Enugu electricity Distribution company EEDC, last week in Abakaliki.

He averred that an upward review of the tariff payable to power distribution companies in Nigeria was long overdue owing to dire need of the companies to remain afloat.

According to him, the 2013 privatization of power value chain in Nigeria was having a telling effect on the nation’s socio economic life.

He said, “In the hotel where I lodged last night, their power generating set was faulty and there was intermittent power outage from public power supply for up to eight times in one night.”

He therefore adduced that paucity of funds at the disposal of the Discos militated against their efficient service delivery since it was meant to be a business venture aimed at profit making.

Mr. Onyegbule frowned at the persistent epileptic power supply which he said was negatively affecting the operation of government and its agencies.

The NERC commissioner noted that myriads of infrastructural projects were ongoing in Ebonyi State which needed adequate power supply to function.

Consequently, he decried the N86m reportedly spent so far in Ebonyi state by EEDC as inadequate for five years.

He said, “We need more investments here. If this can happen in a state capital, I wonder what would be going on in the rural areas.”

He further submitted that the plight of the DISCOS was pitiable since they inherited a moribund electricity industry which was almost in a state of comatose when it was privatized in 2013, likening it to a second hand vehicle that needed proper servicing to function.

Throwing his weight behind the proposed tariff upward review, he asserted that, of the 22 power generating companies n Nigeria, only six were owned by the government and those six have been run down.

He said, “DISCOS have to be allowed to do what they ought to do in order to serve us better. If you depend on market forces, it is impossible since for the past five years, there had been no increase in tariff in tandem with the economic reality.”

Speaking in the same vein, the EEDC Regulatory officers, Mrs. Nicheta Okeke made a passionate case for tariff upward review.

If you can allow us to review our tariff reasonably without too much burden on the consumers, over a short period of time we will improve and serve the best interest of the customer.

According to her, the company progressively recorded a shortfall of revenue from the year 2013 till date. She itemized the shortfalls as follows: 2015 – N14.429b, 2016–N25.867b, 2017 – N25.091b 2018 – 32.258b and 2019 – 46.363b

Mrs. Okeke attributed the shortfalls to the federal Government’s failure to keep its own side of the privatization bargain. She unveiled that the federal Government had promised 11.383 megawatt power generation but so far had been able to generate 4.686 megawatt for distribution to consumers.

Again, she opined that the current tariff was pegged at 8.8% inflation percentage but actually obtain a 12.13%. The dollar exchange expectation was N198.97 to a dollar but what obtained in reality was N363. 50 to a dollar

Emphasizing that the DISCOS were highly regulated Agencies, Mrs. Okeke stated that they were at the receiving end of the electricity value chain whereby they bought energy from GENCOS, pay also to transmission companies from the amount realized from distribution tariff.

“We purchase energy but do not have cost reflective tariff. We were supposed to have increased twice but were stopped by the government”

According to her, EEDC has so far invested N14,457,619,662.49 without recouping much. It was for this reason, that NERC approved upward review of tariff for them. She said the company was proposing a 50% upward review of the tariff. “We promise to strengthen our network and serve you better”.

The customer service manager, Ijeoma Ogudebe said EEDC’s effort to improve its service delivery warranted it to set up a 24 x 7 call centre to promptly respond to customers’ needs and complaints, also various social media platforms and also established over 157 service centers across the zone to bring their services closer to the people

She unveiled that over 90% of customer complaints were resolved to their satisfaction.

Various customers seized the opportunity to air their grievances over the poor services of the EEDC to their customers. Their complaint ranged from overbloated estimated billing, unavailability of pre-paid meter and delay in attending to their requests. One of them, Ike Samuel from Okposi, Ohaozara submitted that the customers would not mind the upwards review if only the EEDC would improve on its services to the people.

Obasi Linus on his part proposed a 15% tariff review against the 50% proposed by EEDC while others while others suggested that the proposal be kept in view for further consultation with the consumers, with a final input at the last quarter of the year.

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