DISCOS’ prepaid meters: Waiting for Godot

Yemi Olakitan 

When it was revealed by the Nigerian Electricity Regulatory Commission (NERC) that electricity consumers would now use prepaid meters instead of the estimated billing system, many heaved a sigh of relief. However, Nigerians have been plagued with disappointments as the promised meters have refused to come. The consumers have continued to complain about the situation and it seems there is no solution in sight. Ag. Head of Investigations, Yemi Olakitan, examines the issues.

Electricity generation began in the country in 1896, specifically in Lagos when the first power plant was built. However, over the years, population has increased more than electricity supply can catch up with in the country. Reforms aimed at meeting the demands of Nigerians have not changed the situation of power in the country while neibouring and smaller countries such as Ghana and Benin Republic are enjoying uninterrupted power supply. Nigerians can only hope and dream. The major reforms really began in 2001 when former president Olusegun Obasanjo set up the National Electric Power Policy. The National Electric Power Authority, NEPA, was then renamed the Power Holding Company of Nigeria (PHCN) with the formation of 18 companies. In his first 100 days in office, which began on May 29, 2007, having been sworn in as Nigeria’s President and Commander-in-Chief of the Armed Forces, President Umaru Musa Yar’Adua made major public policy pronouncements concerning the perilous state of Nigeria’s energy and power sectors respectively. He pledged to improve the existing poor state of power generation capacity in the sector by declaring a state of emergency on the sector.

However, the situation remained the same until his demise. When President Goodluck Jonathan came on board, he also set up the Presidential Action Committee on Power (PACP), which plays a major role in reforming the sector. The PACP provides an oversight of the implementation of reforms in the sector. President Jonathan created the Power Sector Reform Roadmap which led to the construction of new plants. He also pursued the privatisation of the generating plants (GENCOs) and the distribution companies (DISCOs) believing that when they are in the hands of private companies, electricity generation and distribution will greatly improve.

The government succeeded in getting the GENCOS and DISCOS privatised despite the Labour movement’s resistance. The ownership of these companies was transferred in November 1, 2013 and the government assured Nigerians that meters would be distributed free to consumers to ensure accurate billings for domestic and industrial consumption.

Later on, Nigerians were asked to pay between N25, 000 and N50, 000 for prepaid meters under the Credited Advance Pay for Metering Implementation (CAPMI) scheme.

The exercise raised hullabaloos, still many paid to get the meters installed while others exchanged their old meters for the new one. A few Nigerians are using the prepaid meters while the majority are still awaiting the new prepaid meters which according to experts are far better than the estimated billing system which is being practised by distribution companies.

The introduction of the prepaid meters, according to reports, will ensure that Nigerians are set free from the era of indiscriminate bills by officials of the Power Holding Company using the estimated billing system. This is why the introduction of the prepaid meters was greeted with great hope and relief. However, Nigerians are yet to have the prepaid meters that were promised them. They have continued to suffer epileptic power supply amid huge electricity bills.

Investigations by Sunday Mirror reveals that the prepaid meter if introduced would need to be credited with funds of the subscriber before the consumer will have access to electricity. The estimated billing system which is currently used by the distribution companies allows the subscriber to start using electricity from day one even without paying for it. This way, the practice of bribery for free electricity can be sustained and distribution companies can continue to bring outrageous bills to consumers even when they do not enjoy the electricity.

Reports revealed that a prepaid meter system has far more numerous advantages over the estimated billing system. This includes allowing the subscriber to only pay for what he can afford in advance and so it is budgetfriendly. The estimated billing system doesn’t control what the subscriber uses and it is less budget-friendly since a consumer could use more than he budgeted.

Another benefit of prepaid meter billing system is that it encourages savings on electricity consumption. One can choose not to use electricity for a period and in this way minimise his bills. The bills one may have to pay may be the service or maintenance bills which are at a flat monthly fee. The estimated billing meter system doesn’t encourage savings on electricity consumption since there is always a monthly fee to be paid for electricity supply whether power was available or not.

In a chat with Adesina Idris, the supervisor of Alesh Hotel, Lekki, he said, “The officials bring exorbitant bills to us every month and we have to pay otherwise our light will be disconnected. They did not even approve the prepaid meter for us. We have the estimated billing meter and we are paying a lot of money on that. This last money we paid was about N530, 000. Our bill usually starts from N350, 000 per month. We have been saying that this bill is exorbitant even though we call their boss, the ‘Oga of the NEPA’. They say he is on leave. They are using it for business. Anyone working with them can arrange something like that every month. The least bill they give us here is N350, 000. In fact, we have been paying our profits to this people. It’s crazy we have requested for the prepaid meters but they have refused to give us. The bills are too much even if we resort to our own generators we still have to pay. This thing is on a monthly basis. It is killing business; with the estimated billing system these officials no longer read the meters but they just ensure that people pay a fee every month and this has been increasing over the years. Government should do something about it; electricity should be more affordable. These are the remote causes of unemployment in the country. If the cost of staying in business is too high, many people will close the business and then there would be unemployment. This is the problem we face and it is killing the economic situation. The prepaid billing meter should have been made available to all,’’

In 2007, many Nigerian consumers of electricity believed the solution to ending the headache of estimated billing on the old post-paid meters was to apply for a pre-paid meter. But five years after, they are more disillusioned than ever. However they still get outrageous bills every month even when power supply is not commensurate. Many paid for a prepaid meter before the privatisation of PHCN. Till today, no meter has been given to them. Every month, they get outrageous bills. The situation is compounded by the irregular and inadequate power supply.

In another chat with Mrs. Florence Akereja, she said, “In my compound, we have paid money twice to the officials. .The first time we paid the money, we waited for so long expecting them to come and install the meter. Later they said the man to do so has been transferred. Another official came and promised us heaven and earth that the prepaid meter will be brought to us. We contributed money; there are about 10 families in our compound. It is absolutely a residential home. Till today, we are yet to receive the prepaid meter and we don’t know why.”

Investigations by Sunday Mirror reveal that consumers prefer the prepaid meter to the estimated billing meter system but many do not have it neither do they know how to get one.

In another chat with Mr. Babatunde Adisa, Managing Director/CEO, Bamaja Entertainment which includes a hotel, restaurant and cinema in the heart of Ebute Metta, Lagos, he said, his company spends so much money on diesel for our generators.

“If we add the amount we spend on generators to the electricity bills we pay, you will discover that it comes very difficult to pay salaries to our workers. It is only by the grace of God that we are surviving in business. Speaking on the benefits of the prepaid meter, he said it allows for privacy because all you need is to buy the recharge cards and then load it in your meter. There would be no need for company officials to visit your home or office just to record the last meter reading before issuing a bill. The prepaid billing also does not give room for bribery and corruption. There is no need for one to bribe any official; it is what you use that you pay for. It is just like loading cards in your GSM phones. It will also benefit the companies in the sense that it reduces their cost of operations. There would be no need to have hundreds of officials who manually go about to read meters from house to house. It pays both sides of the bargain. The actual point we are now is that some people have the meter and the majority do not have it,’’ he said.

In a discussion with Mr., James Xavier, an IT professional on the benefits of the prepaid billing system, he said, ‘‘Landlords and tenants no longer have to worry that their power will be cut by the PHCN officials when bills are past due since they can be paid in advance under the prepaid billing system. The incidence of bribery among electricity consumers and the power company officials is drastically reduced. Under the whole system, consumers who have not paid bills tend to bribe the company officials in order to enjoy free electricity and this doesn’t help the organisations generate the income due to it; even the growing complaints from consumers about over-estimated or ‘crazy’ billing can come to an end. NERC needs to step up its game and keep the DISCOS on their toes in making the necessary investment to ensure a robust metering of customers and curb the wild estimated billing. A prepaid meter is an electricity meter which only provides the subscriber with power after payment has been made. This can be in the form of a meter token or credit purchased prior to use. If this is done, we would have put an end to the era of crazy electricity bills in Nigeria.”

According to a report by NERC, the metering gap in the Nigerian electricity market is big, with about 50 per cent of consumers being without meters. Investigations reveal that there is growing demand for prepaid meters by consumers, but the new investors in the electricity distribution companies (DISCOS) have done very little to make prepaid meters available to consumers who are willing and ready to buy. Based on the proposals submitted by the core investors of the DISCOS, about 6.52 million new meters would be installed over five years, meaning more than one million would be installed yearly. The situation on the ground reveals that the DISCOS are far away from this goal as many consumers are still waiting for the prepaid meters.

In a reaction to consumers’ complaints, the Chairman of the Ikeja Electricity Distribution Company (IKEDC), Mr Abiodun Ajifowobaje, revealed that no fewer than 43,000 prepaid meters have been tampered with by their owners out of 134,000 installed by the company in the last five years. This stunning figure represents about 32 per cent of the total number of the item managed by the electricity company. According to him, those engaging in such practices pay less on power, while the bulk of the power they consume is not being paid for.

“When people tamper with the prepaid meter, it’s difficult to know because the meter will still be reading but not accurately. It is only through careful finding that such practice can be unconverted. 6,000 prepaid meters were currently in store, and would be allocated to customers that had made deposits for them. Applicants for prepaid meters that have yet to make any deposits will benefit from the next phase,” he said.

On estimated billing, Ajifowobaje stated that the company was following the Nigerian Electricity Regulatory Commission’s directives.

However, a consumer who craved anonymity said, ‘‘Prepaid meters are being used globally even in poor West African countries without problems, but here in Nigeria, we are still wandering in oblivion. It is time we put in the right perspective as far as electricity supply is concerned. Byepassing meter is a crime, be it the analog or the prepaid. It should be punished severely. But estimate billing is worse. It is exploitation and fraudulent. Meters are the property of DISCOS. Consumers pay monthly meter maintenance charge of N750. This too is an aberration where there is no functional meter or meter reading. Neither the Electric Power Sector Reform Act 2005 nor the Metering Regulations code of NCC requires that it must be a prepaid meter, but we cannot choose to be outdated while the nation is moving forward.’’

The Eko Electricity Distribution Company, EKEDC, on its part blamed the delay in the rolling out of prepaid meters to consumers on the fear of bye-pass of its meters. The company’s Vice President, Legal, Mrs. Wola Ojoye, said that bypassing of payment for electricity consumed was evident mostly with prepaid meters.

She said this fear has been responsible for the company’s inability to distribute the 9,000 prepaid meters it inherited from the defunct PHCN when it took over on November 1, 2013, adding that these meters go into negative use after consumption of electricity already paid for by the consumers.

She said the company was prepared to partner with manufacturers of best quality prepaid meters that would not be bypassed by its consumers, stressing that whether such meters were locally made or imported was not the issue.

Ojoye said EKEDC has a plan to roll out meters in the country, noting that the plan has already been forwarded to the electricity sector regulators, NERC, in Abuja for their approval. She said the company met enormous problems when it took over, stressing that what EKEDC met was not what it was told.

The Federal Government and electricity workers have been divided over the cause of the inability of the PHCN to ensure effective metering of its customers across the country. The government had earlier through NERC promised to distribute the meters free and then made a U-turn when it said the meters must now be procured by customers. The National Union of Electricity Employees (NUEE) blamed the government’s action as the cause of the scarcity.

Minister of State for Power, Zainab Ibrahim Kuchi, however, absolved the government of wrongdoing on the issue. Kuchi said paying for the meters was necessary, because government could not afford to pay for the meters. She added that the money for meters was not included in the appropriation bill, and that any customer who paid for a meter would be compensated over time; such customers would get energy credit and reduction in their fixed charges over time. The National Secretary of the union, Joe Ajero, however, lamented the inability of the Federal Government to build meter manufacturing companies, which he blamed for NERC’s inconsistent pronouncements on the prepaid meter payment. He said, most of the meters that were in use across the country were being imported by government, a situation that had contributed to the scarcity.

However, investigations reveal that earlier in the year, a consortium of companies in the country had sealed Memorandum of Understanding with some Chinese group of investors for the assembling and manufacturing of the prepaid power meters. The deal was reportedly consummated at the headquarters of the Federal Ministry of Industry, Trade and Investment, in Abuja and was facilitated by the Nigeria – China Business Council led by its National Coordinator, Mr. Matthew Uwakwe. A statement from the ministry stated that the agreement was signed by representatives of Skydeep International limited, Mattek Oil Services Limited, Temps Engineering and Gestric Limited, Craag Nigeria limited, JMET Corporation and Jiangsu Sainty International Group. The objective of the agreement was to facilitate financing, procurement and operation of independent power plant projects as well as the local assembly and manufacturing of prepaid power meter, assembly and manufacturing of recharge cards and setting up of skill acquisition centres for capacity building.

Permanent Secretary, Ministry of Power, Amb. Godknows Igali, said local manufacturing of meters was a priority for government since the government hoped to provide meters for all Nigerians.

However, another customer, Pastor Clement Ofunoye, said he successfully procured the prepaid meter for his home about five years ago and he has been using it since then.

‘‘Though the complaints made by many consumers are real. Some of us still have the prepaid meters in our homes,’’ said the cleric.

According to him, his experience on the prepaid meters has been positive.

‘‘I have not had any negative complaints. The process is like the GSM phones. It is what you pay for that you will use. It is a better system. I hope the Federal Government will live up to its promises and make the meters available to all Nigerians because it is the way to go. A situation where some have and others do not is not advisable. This makes the (DISCOS) use one system for some and another system for others. We are all Nigerians. The constitution guarantees our freedoms and welfare in our country. It is high time we got it right when it comes to electricity in Nigeria because without electricity the country cannot move forward as it should. Nigeria must take her rightful place in the comity of nations; we must achieve uninterrupted electricity and it starts from simple matters like the meters. If we cannot get simple things such as meters right, what happens to bigger ones such as electricity generation, ’’ he asked.