How PHCN CEOs Bungled N2.9bn Metre Fund 4 years ago 1

A panel of inquiry set up by the Nigeria Electricity Regulatory Commission (NERC) has uncovered damning glitch in the management of a certain N2.9 billion approved by the Federal Government as subsidy for the supply and installation of prepaid meters to electricity consumers across Nigeria.

According to the panel, this amount was approved for disbursement under the now rested Multi Year Tariff Order-1 (MYTO 1) and released as subsidy to the respective Power Holding Company of Nigeria (PHCN) distribution companies (DISCOs) to provide prepaid metres to its various customers, and improve its revenue generation.

It was discovered that although, Chief Executive Officers (CEOs) of PHCN discos regularly received draft payments for metres from customers, but they never accounted for such monies or provided metres to the customers, thus, indicting them of sharp practices.

The panel, headed by human rights lawyer, Mr. Bamidele Aturu discovered that as against the general information of shortage of meters, the Discos actually had metres in stock but failed to supply and install them accordingly.

It has therefore recommended, among others, that local production of prepaid metres should be encouraged by the government to enhance availability and perhaps, curtail corruption in the system.

According to the report of the committee, which was officially delivered to NERC in Abuja after its nationwide investigation, the total number of customers captured in the records of operators of the Nigerian Electricity Supply Industry (NESI) was put at 5.1 million indicating just about 18.65 percent of Nigeria’s total households; this however excludes illegal consumers of electricity that are not registered by the distribution companies.

It indicated that out of the number of customers registered; only 2.9 million customers were metred by PHCN discos while about 2.4 have remained unmetred so far.

The report read in parts: "It was further established that the CEOs were responsible for the inefficiency that permeate the system. For instance, the monies for meters are paid through draft by customers to the CEOs and there is no feedback as to whether they get the meter or not and how long the customer stays before getting a meter.

It was revealed that in most of the discos, even though meters were in stock, customers existed who had paid for years and were not supplied any. "This was confirmed when some customers immediately presented receipts of payment upon the declaration of some CEOs of their readiness to meter within a week, those customers with evidence of payment. With this revelation, it shows that meters are not scarce as the CEOs widely alleged", the report added.

While presenting the report, Aturu emphatically declared that the various PHCN distribution companies had not properly accounted for metering funds within their disposal.

He said: "Sharp practices and inefficiencies are the hallmarks of the metering system; from ageing power plants and terrible transmission lines to more importantly, rampant corruption and poor collection rates.

In virtually all the six zones visited, we received complaints ranging from outright refusal to meter customers, estimated billing following refusal to read installed non- prepaid meters, culture of impunity of PHCN staff, connivance of some unscrupulous PHCN staff with private individuals to defraud the general public, allegations of connivance of PHCN staff and the public to by-pass meters, demand for money for preferential treatment in various forms, un-receipted additional payments were made for supply of meters. These allegations were sufficiently supported by documentary evidence."

Aturu added: "The committee was informed that due to persistent clamour for funds by discos for the purpose of procuring meters, the sum of N2.9 billion in MYTO 1 was released as subsidy to the discos to make meters available for customers.

"Although the committee was informed that CEOS of the discos are yet to fully account for the funds, we found that their customers remained largely unmetered. There are also evidences of some discos refusing customers’ prepayments for meters especially prepaid meters."

"In its recommendation to NERC on accountability and transparency in the metre procurement and installation process, Aturu stated: "In view of the findings by the committee of the existence of obligatory metering provisions in terms and conditions of distribution licensees, the committee hereby emphasises that NERC should enforce the aspects that relate to metering all customers at the discos cost.

"This is coterminous with the principle that metres are the properties of the distribution companies and hence they should concomitantly bear the cost. The committee is however, apprehensive that this target of bridging the gap giving the huge metering crises, the committee recommends phased but consistent approach in order not to create unrealistic expectations."

He equally noted that electricity consumers are being reaped off by the discos through estimated billing as customers in Lagos, Enugu, Yola, Kaduna, Makurdi and Abuja distribution companies alleged that delay in supply of meters to customers and blatant refusal to obtain correct meter readings which resulted in estimated billing were deliberate.

Chairman of NERC, Dr. Sam Amadi, in his appreciation of the committee’s tasks, assured that revenue from the hike in electricity tariff would not be a windfall for discos but would be invested in the system.

Amadi explained that MYTO-2 had provided all the funding needed to run efficient electricity industry, pointing out that no disco would be allowed to mismanage funds for specific subsector of its business. Home Page

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