April 21, 2024

Fallacy of ANED’s claim and rational business ethics



It is no longer news that the Nigerian power sector in spite of the unbundling is still faced with a number of challenges, some if which are not structural but legal. Thus necessitating the call for review the Electricity Act of 2005 in order to bring in more dynamism and address some of the challenges that are not structural.

One of such challenges is the issue of customers purchasing electricity equipment which includes but not limited to, transformers, meters, cable wires and others only for the distribution companies whose responsibility it is in the first place to provide, to assume ownership of them without any form of compensation for the customers.

The refusal of electricity distribution companies, DisCos, in Nigeria to invest in infrastructure is to say the least an outright disregard to the purpose of the privatisation. It has not only left the industry in comatose but raised questions as to the rationale behind the privatisation exercise. This is why some Nigerians are calling for the revocation of the license granted the operator claiming the action has brought more pains than the proposed gains.

But in a bizarre rationalisation, which of course has become the characteristics many business owners in the country, the Association of Nigerian Electricity Distributors (ANED) recently justified the unethical practices saying Electricity Distribution Companies (DisCos) assume ownership of equipment purchased by consumers in order to ensure public safety. In order to make their argument sound good, the association described such purchases that seems more compelling as the operators are usually not interested in providing or replacement in case of damage as “donation.”

In a statement issued in Abuja penultimate Monday, ANED’s Executive Director for Research and Advocacy, Sunday Oduntan,  said DisCos normally assume ownership of donated equipment because of “indemnity and protection“.

He noted that the DisCos usually took responsibility for any incident that happened with such donated equipment.

According to him, it is important for Nigerians to understand that DisCos have a responsibility to ensure that only good quality equipment duly certified by Nigerian Electricity Management and Safety Agency (NEMSA) are installed in their networks.

“After installation, DisCos have to take steps to protect such equipment so that it will be safe for use by customers.

“We have had occasions when some transformers that were installed in the days of Power Holding Company of Nigeria (PHCN) caused electrocution.

“We need to protect the equipment and ensure that access is only granted to qualified personnel. People have lost their lives because they were trying to maintain their transformers.

“This is why we ask customers to write a letter of donation to the DisCos. If the items do not belong to the DisCos, they cannot exercise any right over the use of the items, neither should they bear liability for any incident that occurs thereafter,” he said.

The last paragraph of his rationalisation where he said: “If the items do not belong to the DisCos, they cannot exercise any right over the use of the items, neither should they bear liability for any incident that occurs thereafter,”  in the view of EnergyDay is not only contentious but seems like an attempt to whitewash their incompetence.

It is our considered view that it is the responsibility of DisCos to provide equipment, including transformers, and there is no excuse for any dereliction on this score, and if communities have chosen to do their work for them, it behoves the particular DisCos in question to make room for compensation.

It is elating that on this, Mr.Oduntan admitted that it  the responsibility of DisCos to provide electricity infrastructure, but smartly transfer same to the consumer who will still pay for the services offered that in situations where the demands exceed supply due to a shortage of funds, they (consumers) do step in to help their communities.

In defence of his employers, Oduntan claimed the DisCos have since privatisation in 2013, invested considerably in improvements in their networks, but in the opinion of this medium not much is on ground to justify the said investments.

He stated further that “it is understandable when a community of customers decides to step in rather than take the option of waiting till resources needed to service their needs are provided by their respective DisCo.

“The issue of community volunteering is very clearly stipulated by the Nigerian Electricity Regulatory Commission (NERC).”

There are so many nagging questions that it would seem the current Act have not really addressed.

More importantly,  there is a need for DisCos to offer compensation for any communities that make their work easier, especially the   purchase of equipment for them such as transformers.

We call for urgent review or amendment of the Act to accommodate these concerns.

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