The unending darkness permeating Nigeria today resulted from the 2013 mistake of selling majority stakes in the electricity distribution companies (DisCos) to private investors as part of larger efforts to improve the country’s electricity supply, which constant power failures across the country had disrupted. 

Unfortunately, after 12 years of practical operations, these private investors have become technically incompetent with severe illiquidity challenges that weaken their capacity to perform, demonstrate competence, and deliver electricity satisfactorily to customers in line with policy and public expectations. Worse still, nothing suggestive that the DisCos can improve performance and efficiency, translating into a burden for Nigerians without government interference. 

Through their poor conduct and performance, the DisCos have undermined the intention and objective of the federal government’s electricity reforms, which aimed to strengthen the power sector through private sector participation in delivering efficient and quality service.  

The reforms, which started with the enactment of the Electric Power Sector Reform Act 2005 (EPSRA), led to the formation of the Nigerian Electricity Regulatory Commission (NERC) and the creation of the Power Holding Company of Nigeria (PHCN). The PHCN was later segmented into Generation, Transmission, and Distribution, from which the DisCos were created.

The reforms were necessitated by constant power failure induced by the poor condition of a network of power assets, including moribund facilities and equipment, and the government’s poor handling and management of the electricity sector.  These challenges were identified as obstacles impeding the efficient and regular supply of electricity to consumers, leading to the eventual sale of six GenCos and eleven DisCos to private investors.  

So far, the DisCos have failed to inspire public confidence. They often attribute their failure to inherited obsolete and unviable equipment, a defence mechanism too weak to attract public sympathy. The DisCos’ inability to identify the depth of facility decay before agreeing to take responsibility for the job exposes the gaps in their technical know-how. Their failure to replace most of the moribund equipment and facilities confirms their poor financial health, a factor that should have been activated for their disqualification. 

DisCos may resort to sharp practices to mitigate this financial deficit, such as estimated billing, varied service bands, passing on the cost of faulty equipment replacement to consumers, and unjustifiable blackouts. 

For example, despite leveraging government and banks, consumers are fraudulently asked by DisCos to pay for faulty distribution facilities and equipment, including wires, cables, conductors and transformers.  Even after compelling consumers to fund the replacement of faulty equipment, ownership of such assets reverts to the DisCos. Yet, no payment waiver or concession is extended to customers for electricity consumed.  

Consumers indirectly bear part of the DisCos’ operational costs despite paying electricity bills. Because consumers are caught between the deep blue sea and the hard rock, the DisCos have now made it a bureaucratic culture to incessantly demand that they replace faulty lines and equipment, including transformers. The DisCos’ field electrical engineers capitalised on this unwholesome practice to constantly push the cost of maintenance down consumers’ throats.

Besides, estimated billing has become part of DisCos’ trick for defraying the cost of operations. Consumers are billed based on estimation against prepaid metering, a preferred option to support their balance sheet. This explains why obtaining prepaid meters is cumbersome and frustrating. DisCos deliberately made the issuance process difficult to discourage consumers even when prepaid meters were available.  

Categorising consumers into different bands is also a strategy to increase revenue, particularly in Band A. This category of consumers is allocated at least 20 hours a day but receives less supply quality despite the associated high tariff of about N207 per kilowatt/hour (KWhr).  

Consumers who migrated to bands B, C, D, and E also complain of inadequate supply that is not commensurate with their service bands. From the approved minimum, Band B is entitled to 16 hours, Band C—12 hours, Band D—8 hours, and Band E—4 hours daily. Yet, blackouts persist, with supply at variance with the approved service minimum in the different bands. It appears to be a ruse designed to fleece consumers.

This inefficiency has negatively robbed the DisCos of their reputation and public trust to the extent they have waned.  It is so bad that, for example, pickup ladder trucks conveying field workers of DisCos now conjure images of crooked personnel going around to extort consumers over non-existent faults.  The presence of these field engineers triggers apprehension among consumers over the possible alteration of the electricity balance.  All these violate regulatory operating standards as depicted in the Key Performance Indicators (KPIs) set by NERC. The KPIs are metrics designed to measure the performance of the DisCos.

When organisations entrusted with delivering electricity to final consumers consistently fail to achieve their targets, resulting in poor quality of life and a business downturn that impacts the gross domestic product (GDP), the government should mediate and put the sector on a new trajectory to guarantee an improved and regular supply of electricity.    

This is where the NERC, which was established to oversee the activities of the DisCos, is expected to act on behalf of the government to compel them to operate within the framework of the established KPIs through regular monitoring and enforcement of compliance. The KPIs include management accountability, increased operational performance, improved electricity delivery, customer service satisfaction, metering, customer complaints resolution, estimated billing, and quality of service delivery. 

But so far, the NERC has not lived up to its billings, as evidenced by the DisCos’ failure to meet their KPIs and flagrant displays of nonchalance, impunity, and inexperience. Besides a five per cent reduction in operational expenditures as a penalty for non-compliance with energy offtake, no serious sanctions have been imposed on the DisCos, a gap they have exploited to perpetuate darkness in the country.

Put differently, apart from management accountability, beyond consumers’ determination, DisCos breach other KPIs more than they comply with. For example, there is no improvement in performance or increased power delivery to consumers. The metering system is also poor, fueled by non-availability or indiscriminate meter issuance and estimated and delayed billing. Besides, consumers are also compelled to pay for equipment, including cables and transformers. These are part of growing customer dissatisfaction with DisCos’ poor services.   

While power generation companies (GenCos) and the Transmission Company of Nigeria (TCN) are not immune from the general inefficiency of the power sector if the approximately 5,000 megawatts (MW) of electricity currently generated were optimally and efficiently distributed by DisCos using functional and reliable equipment and facilities, the magnitude of the blackout currently being experienced in Nigeria would have been slashed.   

The spotlight on DisCos is informed by their crucial role in the electricity supply value chain. Distributors deliver electricity directly to consumers, allowing them to interact with customers. The GenCos and TCN do not interact directly with consumers, removing these organisations from public attention despite their importance in the supply chain.   

In other words, the DisCos are the barometer the general public and consumers use to measure the power sector’s performance. Regrettably, none of the DisCos, including Abuja Electricity Distribution Plc, Benin Electricity Distribution Plc, Eko Electricity Distribution Plc, Enugu Electricity Distribution Plc, Ibadan Electricity Distribution Plc, Ikeja Electricity Distribution Plc, Jos Electricity Distribution Plc, Kaduna Electricity Distribution Plc, Kano Electricity Distribution Plc, Port Harcourt Electricity Distribution Plc, and Yola Electricity Distribution Plc, have shown excellence in their performance.  

Today, the DisCos are a major reason Nigeria is called a “generator republic.” Until the DisCos are dissolved and replaced with technically competent investors ready to invest heavily in distribution equipment and facilities, homes and industries will continue to suffer from poor electricity supply, posing a serious threat to the government’s planned provision of reliable and sustainable electricity. In other words, let the DisCos die so that Nigerians can have light.

Michael Owhoko, PhD, is a Lagos-based journalist and author. Reach him at www.mikeowhoko.com.