Hike in electricity tariff… urging caution

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STABLE power supply has been a vexxed issue in Nigeria. Facts show that over decades, the country has  tried and continued to seek solutions for the country’s seemingly intractable energy problem. The advent of unbundling of Nigeria’s energy sector through creating of subsidiaries and  privatisation  rekindled hopes of breaking the jinx of under performance therein. The goal was to see the country’s power supply enjoy some measures of stability, competition  and affordability as well. Hence, the  general engagements of  key players in the project as Power  Generating Companies (Gencos), Transmission Companies and Distribution firms (DISCOs) by federal government.

HOWEVER, what seemed a milestone achieved in the privatisation of the sector under President Goodluck Jonathans’ regime, hailed when it  came  in 2013,has in about five years  put Nigerians at crossroads on whether there has been significant progress made or the same all-movement- and- no-progress that has been obtaining  in the sector over the years.

THE hopes of fulfilling initial promises to generate between 10,000 and 12, 000megawatts of consumable energy by the new operators in the industry before the year 2020 never manifested as currently, energy generation is  still within 6000 and 7000 megawatts region. Worse, as Gencos, disclosed   only  3000 megawatts is transmitted to the Discos for distribution.

FINDINGS reveal that the Discos do not  have  the financial muscle to buy off total quantity of generated energy; therefore, consumers have to make do with available supplies. The Discos on their part claim to be losing money on investments due to customers’ failure to pay for consumed power or underpayment. Hence, they  seek  all avenues to recoup their investments  irrespective of the  public’s concern or  perception of their performance. Amid the quest for gains, the question on why the country needs power seems lost or at least  not in the front burner of the worries of major  operators in the industry.

] A NEW tariff regime would have taken effect from yesterday, July 1, if not for the National Assembly’s thwart of the move on Tuesday and eventual jettisoning of the idea. The poser arising from the development  are many. Informed observers ponder whether the energy sector really knows why the nation yearns for electric power. Some ask: What are the likely implications of increasing tariff at this point?

UNDOUBTEDLY, the target of every investor in a business  is to make profit. Therefore, the generating, transmission and distribution companies must make money because they are commercial ventures. However, in pushing through this target, the reason power sector was established must not be undermined.

THE need to provide electricity goes beyond consumers’ domestic use of light. Domestic consumable energy in the country stands at 14,003GWh,  industrial energy demand stands at 4057GWh while commercial energy demand stayed at 6,379 GWh according to Nesistats.

UNARGUABLY, national development derives life from its economic buoyance while growth of the economy in-turn hinges strongly on availability of electricity. Statistics show that dearth of power supply in the economy pushed 74.2 per cent of small and medium scale industries into extinction and cut GDP growth to seven per cent in the past decade, according to NECA and NBS’s GDP growth index report.

CERTAINLY, the SMSEs do not have requisite access to use of energy, most of their   businesses would soon  no longer exist. The import is  that their contributions to GDP would plunge . Standard of living will  definitely drop further, while domestic energy consumption will further retract due to consumers weakened purchasing power.

EXPERTS reason that effective  and industrial energy demand all play important roles in shaping the economy and  it’s definitely not possible for all the categories of customers to afford and regularly use with standby power  generating plants given the  expense. Hence, they are confined to pay high bills for even unsupplied energy by the DisCos.

THEREFORE, while operators are pushing for their investments’ security, customers equally deserve protection from unwanton rip off. As a result, there must be a balance between services provided by the operators and payments demanded from customers for the services. Customers must not also bear the brunt of energy lost in transmission process since they are not accountable for that. Given this, before charges on consumable energy, there should be commensurate services provided and, all parties must be justified and above board in their demands.

EXPERTS reason that effective prepaid metering system provides good starting point to address this issue. Why then should tariff increment be contemplated now when all service users are yet to be connected to the system to determine usable energy and commensurate cost?

EVEN as new tariff is contemplated under these circumstances, operators in the sector should be more introspective in striking a balance between customers’ breaking point and irresistible offers in their business models before they force out customers from whatever their services represent.

NATIONAL Light calls for caution in the issues of electricity supplies and tariff increment in the country. We also foresee a likely push for alternative energy source by the wary consumers’ if conditions of service offered by the current operators become very unbearable over priced. Consumers may be forced to seek alternatives like solar energy.

SOLAR panels and energy kits for an average middle class home cost between N700,000 and N750,000. Big amount to majority of Nigerians but if customers are to be billed N25,000 monthly, it would only take about 36 months’ bill to buy a solar power set that could keep one out of DisCos’ headaches permanently.

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