Meter by-pass is heightening collection losses of AEDC thereby negating part of the Power Purchase Agreement between the federal government and the private investor writes ONU OKORIE
Yarfado Mohammed of plot 6 Army Estate Kurudu Abuja does not count energy theft through meter by pass a crime until March 02 2017. On that fateful day, an AEDC staff Mr Otukpanikhim Bobby brought a report at Jikwoyi police station which alleged that the Mohammed criminally by-passed the electricity supply from the meter and consumed 2760 kwh of electricity valued at N101, 154 dishonestly by avoiding payment through the system. It was also discovered that in the process of the said bypass and tampering with the supply system he damaged the meter valued at N86, 000. He was later arraigned at Area Court, Karishi Abuja on March 17 2017 for theft of electricity and mischief, contrary to S. 286{2} and S. 326 panel code law, PCL. He however, pleaded not guilty and was granted bail after fulfilling bail conditions. The prosecutor, Barr Mahmud Lawal said that the Case has been adjourned due to failure of court to sit on several occasions. Speaking on the position of the Case now, the prosecutor explained that the Case which is before Justice Aliyu Ibrahim Kagarko awaits adoption of final written address by the counsels of the parties. A similar case of meter by pass involving CoP vs Christian Okolie {Rich way Hotel} was arraigned at the Area Court Karu on the February 07 2017 for electricity cheating. He however pleaded not guilty and was released on bail after fulfilling the condition. The first information report has been amended from cheating to electricity theft and mischief. Hearing of that case was fixed on December 11 2017. Investigations have shown that the above mentioned cases of meter-bypass amply typify many cases of theft of electricity either by defect or design at the four franchise areas of AEDC, namely, Federal Capital Territory, FCT, Niger state, Nasarawa and Kogi states. In fact many stakeholders argue that meter by-pas constitutes one of the major impediments, now confronting efforts made so far by the federal government at providing electricity to every home in Nigeria. By definition, energy theft implies a dishonest abstraction, diversion, consumption or use of electricity supplied without the consent of providers. It can also assume a form of stealing electricity in connivance with agents of the providers. Like other ten distribution companies: Benin, Ikeja, Eko, Kaduna, Port Harcourt, Jos, Ibadan, Yola, Enugu and Kano, AEDC was licensed in 2013, to carry out electricity distribution as one of the value chains of the system. An investigation however, has shown that energy theft is stifling activities in most franchise areas of the DisCo. For instance, meter by-pass is an identified common energy thefts and endemic problem ravaging areas where the providers have metered. Consequently meter bypass has been given as one of the reasons many DisCos are hesitating to meter customers.A report has shown that currently about four million electricity users representing 54 per cent of the 7.4 million registered users are still unmetered four years after the power sector was privatised in November 2013. Nigerian Electricity Regulatory Commission NERC stated this during presentation at a recent customer consultation forum in Abuja. The metering status as at August 31 by NERC shows that there are 7.476 million registered customers; 3.451 million of them have been metered by the 11 electricity Distribution Companies DisCos while a larger chunk of 4.025m remain unmetered. The data revealed the most backward DisCos on metering customers as following: Enugu DisCo did poorly in metering its 809,829 customers, by metering only 224,445 of them while the larger 585,384 customers (72.28%) are still served with estimated bills with many complaints of overbilling. Yola DisCo has 293,478 customers out of which it metered only 69,282 customers. 76.39 per cent representing 224,196 customers across Adamawa, Yobe, Taraba and Borno states are not metered. Kano DisCo said it has just 472,453 customers across Kano, Katsina and Jigawa states. It has metered only 162,664 with a huge chunk of 309,789 representing 65.57 per cent still paying bills on estimation. For Kaduna DisCo, only 238,901 of its 641,582 customer base have meters while 62.76 per cent, representing 402,681 users, are still expecting the devices in their homes. Ibadan DisCo has the largest customer base of 1.474m from which it has installed meters for less than half – 609,604 customers leaving as large as 864,760 or 58.65% unmetered to suffer estimated billing. Port Harcourt DisCo requires 251,412 units of meters to liberate 51.46 per cent of its 488,600 customer base from the complaints of over estimation. Jos DisCo has 384,691 customers and has metered 187,415. The 51.28 per cent customers left have no meters requiring an investment in 197,276 meters. Abuja DisCo has metered over half of its 862,696 customers, but a significant 412,655 customer base representing 47.83 per cent are still expecting meters as they are being served with estimated bills. Ikeja DisCo has 835,736 customers and has metered 467,578 of them. However 368,158, about 44 per cent of the customers have no meters. For Eko DisCo with 442,201 customers, it needs to procure and install 173,643 meters to bridge the 39.27 per cent metering gap in its franchise area. Meter by-pass: An albatross in electricity market Although Benin DisCo which has 771,226 customers installed 535,935 units of meters, it requires 235,291 units to meter the 30.51 per cent customers left. Given the above data, there is no doubt that the DisCos require more investment to liberate the larger customers under the scourge of estimated billing. As at the last counts, findings show that illegal customers within AEDC franchise Areas constitute over 10,666 customers as at October 2017.Out of these by-pass, tampered and faulty meter constitutes 6710 customers. Also Criminal cases on theft of electricity in form of by-pass submitted to law enforcement agents indicate the following: FCT Central; Police: 57, NSCDC 11, DPP 36; FCT South; Police 6, NSCDC 58, DPP 34; FCT North Police 0, NSCDC 37, DPP 52.Total Police 63, NSCDC 106, DPP 122. Common electricity theft cases include household customer through meter byPass such as connecting to supply cable directly, meter tempering and installing bridges to meter lower loads. Investigations also show that most meter tempering are done by technicians that used to work for the company (former NEPA) or current corrupt employees, normally for a stipend such as 2,000 to 5,000 Naira compensation by and on the request of customer who benefits from such electricity theft. Further investigations also disclosed that the crime is not limited to a particular area within the franchise coverage of AEDC. For instance, AEDC electricity distribution franchise coverage extends to four states: federal capital territory, FCT, Niger State, Kogi and Nasarawa states. The land mass of the AEDC franchise areas cover 133,014 sq km with an approximate customer population of 800,000. Customer population per state is as following: Niger 160, 288, Nasarawa 151,565, Kogi 130, 441 and FCT 420, 387. According to AEDC Director Corporate Services Engr. Abimbola Odubiyi, Meter by-pass is same as theft of electricity, a perpetrator of such act can be jailed. “Meter by-pass/meter tampering is very serious crime because it leads to loss of revenue, which leads to increase in collection losses to the Discos, thereby making it difficult for them to pay in full for the electricity they buy.” “Meter bypass also unnecessarily puts unfair financial burden on other customers that pay. In addition, meter b-ypass can lead to electrical faults in the house of the culprit which can cause fire, electrocution or damage to home appliances.” He stated. There is no gain saying that the crime is a major encumbrance to the development of the sector because it leads to loss of revenue and ultimately increase collection losses to the Discos, thereby making it difficult for them to pay in full for the electricity they buy. It is also snag to the speed at metering all the franchise areas of the electricity Distribution companies, which was part of the power purchase agreement between the federal government and the private investors. The Managing Director of AEDC, Mr Ernest Mupwaya, said that part of the liquidity challenges in the sector was largely caused by the rampant phenomenon of electricity theft. “The major problem that we are facing in the sector is characterised by the liquidity challenge.” “If we analyse further, the liquidity challenge can be traced largely to the theft of electricity and unaccounted energy in the sector. Because to have a sustained improvement in the sector, there have to be efficiency in the way the energy is being accounted for; there has to be deliberate processes that should curtail theft of electricity. ” he stated. The Chairman, Board of Directors of Kaduna Electricity Distribution Plc, Barrister Yusuf Hamisu Abubakar has revealed that the anticipated metering commitment of the 11 distribution Companies during the bidding process was over a million and half meters per annum, but regrettably, the total meters deployed are less than a million over the last three years. According to him, “every capital expenditure to be undertaken has to be provided for in the revenue requirement which is the basis for setting tariff. The total CAPEX provided in the revenue requirement is not sufficient to undertake our metering obligation”. The electricity boss who also expressed satisfaction with the efforts being made to bridge the gap in grid metering, however admitted that there remains a huge gap in the level of metering of retail customers, a phenomenon which he described as “one of the major obstacles facing the Nigerian Electricity Supply Industry (NESI)”. “To engender and sustain stakeholder confidence, everyone must be assured of fair and accurate assessment of supply and consumption. DisCos want to be paid what is consumed and the customers want to pay only what they consume; (only) metering provides this assurance when properly done”, he contended. Under the Electric Power Sector Reform Act (ESPRA) 2005, it was envisaged that a functional NESI will be established with proper market structure. To achieve this, energy accountability across the supply chain is necessary for the credibility and interdependence of the value chain where power is to flow from gas suppliers, generating companies to transmission, distribution and then to the consumers while cash is to flow in the opposite direction. According to Executive Director, Research & Advocacy ANED Sunday Oduntan there was N777 billions of Electricity Market Shortfall as at December 2016. While there was market shortfall accumulating at a rate of N20 to 25 billion monthly with the planned recovery of the N701 billion guarantees, however, DisCos were only able to remit 35% or 35k of every N1 per kWh. The stakeholders argued that it is imperative that customers must recognize that electricity is a commodity with a price that must be paid, while electricity theft must be curtailed. They called for enactment of appropriate legislation that allows for aggressive prosecution of electricity theft culprits. Odutan blamed customers on by-passing, tampering, recoding, hook-ups. “In a particular Disco this constitutes about 62% for NMD and 43% for MD customers; Pool of fraudsters has been inflated hugely by the corrupt staff let go by PHCN and DisCos” he explained. He also suggested that a major scale organised meter fraud has to be combated through tamper proof meters – split unit and prepaid, installed in areas already fully enumerated. He suggested that to create an audit trail of accountability all the transformers and subtransformers must first be themselves metered and that Disco must be reorganised around feeders and sub-feeders and every connection on every feeder must be traced and enumerated into customer database. Also database of meter should get capability to monitor consumption (and lack of consumption) by individual meters to detect meter fraud, and by sub-feeder and feeder to identify corrupt staff. “Until this is in place metering will not work, most will simply be bypassed” he stated. On the implication of the crime against customers he argued that the quantity of energy consumed by Metered customers is removed from all energy delivered to the Discos by feeders; this leaves the unmetered quantity of energy that needs to be divided by the customer classes on each feeder; and the portion of the unmetered quantity of energy that needs to be billed to each unmetered customer is set by using the average energy consumed by metered customers in the same area. Also former chairman Nigerian Electricity Regulatory Commission, NERC Ramsone Owen, argued that one of the ways to curb electricity by pass is for DisCos to install split meters and all distribution companies must undertake customer enumeration to ensure that they know all their customers per electricity feeder and transformer. According to him, “the velocity of electricity going to the customers must be equal to the velocity of revenue returning to the DisCos from the customers. Any time there is gap the problem should easily be identified” He also suggested that the DisCos should look at a meter like the Sim-card of mobile phone to prevent all leakages. Vice Chairman Licensed Electrical Constructors Association of Nigeria, LECAN Comrade Ibrahim Abdullahi blamed the problem of meter by-pass on quack electrical contractors. According to him, “if customers patronise person who knows the law such as licensed electrical technician, he cannot engage in such illegal acts because he would not want to be caught up with the laws. “Nobody wants to go to jail. And of course when any licensed contractor is caught by-passing meter for customer such person could be sanctioned” “When customers patronise qualified electricians who knows the Law, they would not be lured into meter by-pass because such person understands the implications.” He said that when it comes to electricity repairs and installations, his Association is supposed to form interface between the public and AEDC. NEMSA Act 2015 subsection F says that nobody shall practice or carry out any electrical repair or installation in Nigeria except that person is duly certified by the NEMSA. And it is important that owners of business premises and residential areas should engage qualified electricians for safety purpose. He attributed the use of quack electricians to the reason behind by-pass. Also Chairman Sabon Gari Area of Karu local government Nasarwa state, Community Development Association, Ismaila Mohamud believe that most people who engage in the by-pass still see electricity service as a social amenity which ought to be provided to the people by the government without charge. Mohamud said that some cases of meter by-pass has been reported in his domain but was penalised by the AEDC. He however, urged the service providers to step up their game in terms of power supply and engage the public on the consequences of the crime. Mupwaya, while speaking on efforts they are making to tackle the meter by- pass menace said that AEDC has embarked on enlightenment campaign to expose the members of the public on the implication of meter bypass.