The Management of the Eko Electricity Distribution (EKEDC) has identified customers’ attitudes as a major constraint to the bankability of the power sector, a key factor that the Management said was inhibiting the distribution companies (DisCos) in Nigeria from discharging their market obligations and upgrading distribution infrastructure.
Dr. Tinuade Sanda, Managing Director/Chief Executive Officer of EKEDC, made this known during the customer engagement forum at the Festac district on Thursday.
The EKEDC’s MD who was represented by Mr. Joseph Esenwa, EKEDC, Chief Financial Officer (CFO) at the event, said that customers’ attitude toward the settlement of the electricity bills has created a financial burden on the DisCo, limiting the capacity to obtain loans from financial institutions to finance the procurement of transformers and other distribution infrastructure required to improve supply and also settle operational cost.
Esenwa said, “We have obtained funding facility from the Central Bank of Nigeria (CBN), in billions, to upgrade infrastructure, and the resource is not anywhere near what is needed to cater to the infrastructure needs of almost 700,000 customers under our network.
“For instance, we recently took N4 billion loan from the CBN to provide prepaid meters for over 70,000 out of around 200,000 unmetered customers. Our recent data showed that customer base is around 640,000 customers (metered and unmetered customers).
“At this rate and based on access to funds, how much can EKEDC borrow to cater for the balance of about 130,000 unmetered customers?
“These financial challenges are also complicated by the cost of foreign exchange. which has shut up from about N200 per US$ to over N750 per US$. However, we generate cash in Naira and service procurement in US$. So, the cost of these upgrades is huge, and it is impacting our ability to deliver.
“The commercial banks are not willing to provide loan facility to any of the DisCos, because most of them are not bankable, based on their financial records.
“No Bank can afford to finance an unbankable project, especially the one that is characterised by customers who are willing to pay for energy consumption,” EKEDC’s CFO said.
Esenwa, therefore, encouraged the customers to collaborate with the EKEDC to address cash flow issues, emphasising that the management is not satisfied with its inability to meet the expectations of all customers due to cash flow issues.
The EKEDC CFO also noted that the 5 DisCos that have been taken over by new management have also joined in the struggle to settle their financial obligations to the NBET, Market Operator, and customers because of their inability to recover money from their customers.
He said, “The DisCos are disconnected from the national grid by TCN, because of their inability to settle the market obligation.
“We are into business to make money. We are also interested in making the money that can be made from distributing power transmitted into customers’ homes. This is why we are concerned and commitment to power delivery,” he said.
Esenwa further stated that EKEDC is the only DisCo in Nigeria in terms of capacity to fulfill obligations in the industry, adding that this remarkable achievement has been made in the last few years, despite financial challenges facing the sector.
Addressing issues raised in respect of overbilling of customers, the CFO recommended that affected customers should endeavour to get prepaid meters under the MAP scheme. According to him, all transformers within EKEDC’s network have been metered, in order to account for the quantum of energy delivered to all customers.
“Every customer should understand that if there is any form of energy theft through the meter or the transformer, it will affect the bill that will be allocated to every customer.
“If the meter on the transformers has recorded a certain consumption and we are able to identify those who are metered in that neighbourhood. It automatically means that the energy not accounted for was consumed by those customers who are not metered.
“This is why we have always been encouraging community leaders to cooperate with us in bringing the vandals and thieves to book. We must all be responsible for our tasks because someone has to pay for the stolen energy. It is bad to force you to pay for what you have not used.
Esenwa further emphasised that reporting and prosecution of electricity thieves is the only solution to ending estimated billings. He further stated that the prepaid meters are available under the MAP scheme and will be installed in less than 10 days.
He also revealed that the NERC has come up with a market rule ordering all the DisCos to refund the cost of meters purchased by customers through energy credit within a period of 10 years.
Addressing the assumption that EKEDC is responsible for indiscriminate tariff increases, the EKEDC CFO said that tariffs are determined by the NERC, adding that the market is overly regulated, and it is difficult for any DisCo to unilaterally increase tariffs without authorisation from the regulatory authority.
Commending customers in Festac District for their maturity during the engagement forum Esenwa said, “The EKEDC management has related with the customer on what can be done to smoothen operation over a period of time in the district.
He said, “While we are staff of EKEDC, we are also customers in our private capacity. We have heard from the customers regarding what has been achieved and what needs to be done to improve service. We will be coming up short, medium, and long term.”
Mr. Shola Fakorede, President of Festac community’s residents Association, in his comment, identified collaboration and dispute resolution as fundamental mechanisms required in solving power sector challenges in Nigeria.
He said, “It is better to resolve issues through persuasion and one-on-one consultation rather than going to court. As residents’ association leaders, when we receive information, we brief the EKEDC, and all parties involved meet to address it. They have installed some of the meters and at least all the issues were resolved immediately.
“We want to implore the management of EKEDC especially, the Chief Finance Officer, to speed up the response time that is required to address issues that can be resolved in Festac town.
“We have not been enjoying electricity in Festac town and environs in the manner that we expect, but that does not necessarily mean that EKEDC is totally bad.
“We need improvement in the supply of electricity. There are some areas that get more supply than others. We will continue the constant engagement from the last meeting, and I can attest for a fact that something has been resolved. and will be resolved.
Dr. Akinrolabu Olukayo, Chairman Consultative Forum for EKEDC Satellite Town, emphasised the need for resident associations to form platforms to address all electricity issues.
According to him, community leaders should be committed to educating the community members in such a way that would reduce the propensity of agitation. He added that this would bring about improvement and efficient delivery by the DisCo.
He said, “It is wrong to think that the EKEDC management and their personnel have the solution to fixing all the issues in the power sector. It takes collective efforts between the customers and the DisCo to address all the issues.
“Issues revolving around prepaid meters are no longer matters of concern to us at Satellite town. This has gone into oblivion because of the mature relationship between the District Manager and Public Relations Officer of EKEDC in Festac town and the customers in the areas.
“There are platforms where every piece of information is properly disseminated to all customers within the area, which enables everyone to know what to do and how to go about it.
“Through regular engagement such as this, we have bridged the wide gap between the customers and EKEDC. The 21-century approach is the best way to resolve issues without complications.
“This quarterly engagement has afforded the customers the opportunity to know about all the intricacies of the electricity sector. They now have an informed horizon in terms of the operation of the sector and the processes involved in solving them.
As a takeaway from the engagement forum, Olukayode further EKEDC by its idiosyncrasy is expected to expand capacity for delivery of electricity to the customers.
He also charged the EKEDC’s management to focus on the propensity for increasing customers and provide corresponding facilities to match up with the teaming population of the customers in the area.
