Oil & Energy

Towards Efficient Metering Of Customers’ Houses

Published

12 years ago

July 9, 2012

The recent directive by the Nigeria Electricity Regulatory Commission (NERC) that distribution companies (DISCOs), under the Power Holding Company of Nigeria (PHCN) should ensure the metering of all customers’ houses across the country within 18 months could simply be seen as a blue-Peter or blanket-bath for the unbundled power company.

It has since been noticed by Nigerians that even when houses are metered, NEPA/PHCN staff do not read meters before billing, rather they deliberately estimate and issue ‘crazy bills’ and charging consumers for power they did not consume. Even the distribution companies claim that average consumption of those who were adequately metered was applied to a cluster of residence to arrive at estimated consumption and customers believe that the DISCOs calculations for estimated billing were not based on established scientific or reliable parameters.

Eyo Ekpo, the Commissioner for Marketing, Competition and Rates of the NERC had ordered all the DISCOs to submit their metering plans for an effective billing system, adding that the distribution companies were expected to complete the metering process between 12 and 18 months.

“We have told them that between 12 and 18 months, they should be able to meter all houses of their customers” , Ekpo said.

According to him, NERC is determined to ensure greater number of meter distribution to customers.

The main issue bothering customers and Nigerians as a whole is not the metering of their houses but the question is, are PHCN staff prepared to read the meters and give consumers accurate bills?

Metering of electricity in Nigeria, according to a report submitted by the Metering Inquiry Committee, began with the production and consumption of electricity around 1895. The system and process are, however, bedeviled by inefficiencies and corrupt practices.

Historically, electricity metering was centrally coordinated with the various units of NEPA/PHCN at the distribution end relying on the procurement apparatus at the headquarters to procure and distribute meters to customers through three central stores. This inefficient system led to a backlog of meter requests by customers who pay for such services without the meters being installed.

The resultant effect has been the institutionalization of the unwholesome practice of estimated billing and the attendant customer dissatisfaction and disappointment, which partly accounts for consumers’ refusal to register for meters.

It is against this backdrop that the Metering Inquiry Committee was set up to garner data and information on the root cause of the endemic metering crisis in the country which impacts the electricity sector negatively. During its assignment a few weeks ago, the committee discovered that less than 50 per cent of the registered customers in the Nigerian Electricity sector are metered.

This has led to the prevalent practice of arbitrary charges based on unscientific estimation of electricity consumed by customers by the DISCOs in order to meet up with their overhead costs in an environment of inefficiency and dwindling supply of electricity.

According to the committee’s report, the total number of customers captured in the records of operators of the Nigerian Electricity Supply Industry is 5,172,979, which represents 18.65 per cent of Nigeria’s total households put at 28,900,492 as provided by records from the National Bureau of Statistics in 2006. This record, however, does not include those enjoying electricity illegally who are not registered by the DISCOs, known as illegal consumers’.

Out of the number of customers registered, 2,893,701 or 55.94 per cent were metered, while 2,355,045 or 45.53 per cent were unmetered. The Committee, however, discovered that out of the total number of customers metered, about 701,385 or 22 per cent of the meters were faulty. At present, a total of 2,956,069 or 54.83 per cent of all the customers registered are not metered at all or have no functional meters. On the average, therefore, only about 2,434,541 or a minute 8.42 per cent of the total households in Nigeria are currently being billed correctly by all DISCOs if a household is used as our metering index.

The remaining registered customers are, therefore, at the mercy of estimated billing. This development has created a wide gap in effective billing which calls for emergency response.

In Port Harcourt, the Rivers State capital, the Business Manager, Diobu Business Unit of the PHCN, Festus Mmegbu disclosed that as at march this year, 85 per cent of the 36,000 customers using electricity in the area do not have meters. He said there was massive deployment and installation of meters going on and called on customers to register and pay for meters.

He regretted that failure by customers to install meters at their premises was causing under-estimation.

Most customers are clamouring for pre-paid meters as a more efficient metering system that can guarantee accurate billing. This is why the Chief Executive of Ikeja Electricity Distribution Company Plc expressed concern over agitations of customers for prepaid meters which are being used in the area currently.

There is need to develop and adopt a metering system aimed at making smooth and effective our electricity operations. To ensure customer satisfaction, special units should be established by the distribution companies such as tracking/management of customer account records and debts to ensure that no unwarranted debts or excessive estimations are made and also ensure that where frivolous estimates were made in the past, they will be expunged to give credibility to the bills and billing operations.

Electricity distribution companies should ensure fairness in dealing with their customers to maintain the trust and confidence reposed in them. There should be an elaborate customer reclassification exercise aimed at ensuring that no customer is placed on the wrong tariff class. To enjoy the cooperation of customers, distribution companies must make sure that their Chief Executive Officers (CEOs) are responsible, efficient and accountable.

They should avoid the situation where 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 meter. It is discovered that in most of distribution companies, customers paid for meters for years and yet were not supplied any. In most cases, meters are not scarce but the company staff demand for kick-back before releasing the meter.

There are also evidences of some DISCOs refusing customers’ payments for meters, especially pre-payment meters. Indeed, sharp practices and inefficiencies are the hallmarks of the metering system in Nigeria, from ageing power plants and terrible transmission lines to more importantly, rampant corruption and poor collection rates.

In all the six geo-political zones visited by the Metering Inquiry Committee, complaints ranging from refusal to meter customers, estimated billing following refusal to read installed Non-PPM meters, culture of impunity of PHCN staff, connivance of some unscrupulous PHCN staff with private individuals to defraud the public were received.

Other irregularities discovered were demand for money for preferential treatment in various forms such as hot lines, tamper code, PR (unreceipted additional payment for supply of meters. Estimated billing was the norm in all the DISCOs visited by the committee. For instance, customers in Lagos, Enugu, Yola, Kaduna, Makurdi and Abuja distribution companies alleged that delay in the supply of meters to customers and blantant refusal to obtain correct meter readings which resulted in estimated billing were deliberate. They were of the view that with the poor supply of electricity in the country and gross inefficiency on the part of distribution companies to curtail operational losses (human and technical) estimate billing remains the only option for the DISCOs.

For Nigeria to get it right in the metering policy, the Federal Government through the Nigerian Electricity Regulatory Commission (NERC) should review the operations of the distribution companies, especially now that the power sector reform is on the front burner of the present administration coupled with the privatization process of the Power Holding Company of Nigeria (PHCN).

NERC should adopt a regulatory system that would make it obligatory for DISCOs to meter their distribution transformers for adequate energy accounting and equity as well as intensify its monitoring and enforcement machinery to ensure proper implementation of existing regulations on metering, billing and cash collection. There shall be overall improvement in customer service and operations to eliminate the culture of impunity prevailing in the electricity sector.

Shedie Okpara

Oil & Energy

NSCDC’s Anti-Vandal Squad Uncovers Artisanal Refinery In Rivers Community

Published

5 days ago

April 15, 2024

The Tide

The Anti-Vandal Squad of the Nigeria Security and Civil Defence Corps (NSCDC), Rivers State Command, has uncovered yet another local refinery situated at Adobi-Akwa settlement in Etche Local Government Area of Rivers State.
The State Commandant, Basil Igwebueze, disclosed this while speaking to journalists shortly after the tour of the Illegal site.
Represented by the Head, Anti-Vandal Squad, CSC Peters Ibiso, Igwebueze said the squad made the discovery following a tipp off, expressing regret that no arrest was made as the boys fled the site upon sighting the squad.
The cammandant’s representative took the newsmen across a tick forest of about 6-7 kilometers from the main town.
The team sighted where the pipeline vandals tapped into the Well Head of yet to be ascertained multinational company, connected their galvanised pipes to several cooking pots, heat up the crude to produce Automotive Gas Oil (AGO).
In his words, “Upon receiving a tip-off, the Anti-Vandal operatives swung into action to uncover this illegal oil bunkering site. They were in this forest for two days having cordoned the area, unfortunately, the perpetrators upon sighting our men took to their heels, but investigation is still ongoing to effect the arrests of such defiant elements”.
The Anti-Vandal Unit Head further narrated the operation techniques of the operators of local illegal refineries from the point of extraction of crude through vandalism of oil pipelines to cooking in various ovens where the content is subjected to high temperature and transmitted through pipes to reservoirs for storage and onward trans- loading to buyers.
While insisting that the command would not relent in the fight against illegal dealings in petroleum products, he urged the public to have more trust in the NSCDC by providing actionable intelligence that would enhance possible arrest of economic saboteurs in the State.
“Our commitment to continuously work in tandem with the prosecutorial mandate of the corps in order to rid the State of economic saboteurs remains unchanged. We value our informants and most especially the intelligence driven tip-off received from time to time.
“It is also our duty to ensure that our source of information are not disclosed so as to protect our informants. It is therefore our delight that the public will continue to have confidence and trust in us as we together protect the nation’s critical national assets and infrastructure from dare devil vandals”, he stated.

By: Lady Godknows Ogbulu

Oil & Energy

Oil Fund Withdrawals Suggest Extended Price Rally

Published

5 days ago

April 15, 2024

The Tide

The world’s largest crude oil exchange-traded fund has bled over $2 billion in less than a year. And it i
s not due to investors finding greener pastures elsewhere with other ETFs; it is the siren call of soaring prices that is prompting this mass exodus.
The WisdomTree Brent Crude Oil exchange-traded commodity had assets under management of some $2.5 billion last summer, according to Bloomberg. Now, the publication reports, this is down to $396 million, with withdrawals accelerating over the past few days.
In that, withdrawals seem to be following price trends. Brent earlier this month topped $90 per barrel and, after a short pause earlier this week, is back above that threshold again following the latest Israeli strike on the Gaza Strip amid reports about a possible ceasefire.
While it is true that prices are currently driven higher mainly by geopolitical events, fundamentals are also at play. A growing number of forecasters are updating their predictions for benchmarks this year on expectations of resilient demand and increasingly tighter supply. And investors are following the trend.
Even those who have not sold their ETF holdings in order to invest more directly in the rally are benefitting. That same WisdomTree Brent Crude Oil ETC generated returns of over 13 percent during the first quarter of the year as opposed to an average 8.8% gain in the S&P 500.
The WisdomTree exchange-traded commodity became the world’s largest oil fund at the beginning of last year. The fund saw inflows of over $1 billion, which poured in as the deflation in oil prices that had begun in late 2022 extended into the new year. Now, the trend has reversed and it has reversed strongly.
The WisdomTree Brent Crude Oil ETC is not the only fund seeing outflows. The U.S. Oil Fund, which used to be the world’s biggest oil fund before the WisdomTree inflows last year and is now the world’s biggest oil fund once again, also saw a flurry of investor exits as benchmarks climbed higher.
According to Bloomberg, the fund’s assets under management currently stand at $1.3 billion, down from some $5 billion during the pandemic.
In further evidence that oil makes money, the Middle East is about to become the only region in the world with three trillion-dollar sovereign wealth funds. The Abu Dhabi Investment Authority is worth $993 billion, Bloomberg reported in March, while the Saudi Public Investment Fund and the Kuwait Investment Authority are breathing down its neck.
Meanwhile, investment in transition-related stocks is on the decline, according to data reported by Reuters. The S&P Global Clean Energy Index is down by 10% since the start of the year. In comparison, the S&P 500 Energy Index, which comprises Big Oil names, has gained 16.3%.
The data shows that investors are growing wary of all the promises made by transition advocates as evidence mounts that these were not based on due diligence. Wind and solar stocks suffered a crash last year when this first became clear.
Now, we are witnessing a continued awakening among investors to the challenges and the realistic potential of transition technology and alternative energy sources.
“With conventional energy having its own bull run, I think the alternative funds will struggle for the foreseeable future, and we shall see what the election brings”, the Managing Director of capital markets at Phoenix Capital Group Holdings told Reuters.
The comment summarizes the challenging situation for alternative energy investment and highlights the rebound of interest in oil and gas, much to the chagrin of decision-makers on both sides of the Atlantic.
In both Europe and the U.S., things can get even worse for the transition after the respective elections—in June for European Parliament and in November for U.S. President. It will certainly be an interesting year in energy.
Slav writes for oilprice.

By: Irina Slav

Oil & Energy

CNG Initiative: FG Targets 25,000 Jobs, $2.5bn Investment

Published

5 days ago

April 15, 2024

The Tide

The Programme Director and Chief Executive, Presidential Compressed Natural Gas Initiatives, Michael Oluwagbemi, has announced the Federal Government’s plan to target over 25,000 jobs and $2.5 billion worth of investment by 2027.
Oluwagbemi made this known during the Presidential CNG stakeholders’ engagement workshop held at BOVAS Auto-Gas Filling Stations, Ajibode Bus-Stop, in Ibadan, Oyo State capital, at the weekend.
He stated that the initiative, which was part of palliative measures to ease the burden of the removal of fuel subsidy, would attract enormous investment and job creation as well as impact positively on the lives of Nigerians.
Meanwhile, he called on Nigerians to embrace the new initiatives by the Federal Government as part of palliatives to cushion the effect of the removal of fuel subsidy in the country.
“On October 1, 2023, when the President gave his speech, he announced that the Presidential CNG initiatives are going to be rolled out as part of palliatives on the removal of fuel subsidy.
“One of our major concerns is to make sure that the transition for the transportation sector is a cheaper, safer, and more reliable source of energy.
“In the coming weeks, we are going to be announcing the conversion incentives programme which will enable Nigerians currently using PMS and Diesel fuel vehicles to be able to convert their vehicles at designated places across the country at a discounted price based on certain pre-qualification under the palliative programme of the Federal Government”, he said.
On the value chain of the initiative, Oluwagbemi explained that the Federal Ministry of Finance is acquiring tricycles and buses that would be assembled and manufactured in Nigeria, with more than five automobile firms being activated.
“The value chain of the programme starts with every one of us. From the point of converting your vehicle, you have created the demand for natural gas.
“If your vehicle is converted by technicians and refuelled by autogas workshops across the country, then you are creating jobs for civil engineers and technicians. You’re creating jobs for the upstream in terms of upstream activities associated with oil and gas.
“And in line with the programme, the Federal Ministry of Finance is acquiring a number of tricycles and buses that will be assembled and manufactured in Nigeria. More than five of our automobile firms have been activated. So, you can see that in terms of job creation, the opportunities for Nigerians are enormous.
“The President has said we need to convert one million vehicles by 2027. We need 1,000 conversion shops and we need over 3,000 filing stations just like this. You can imagine the level of investment required for this.
“In order to sustain one million vehicle conversions by 2027, we need 25,000 technicians. So, the job creation potential is an opportunity for job creation in addition to our gross domestic product, $2.5 billion worth of investment to be mobilised in the next four years and of course more than $25 billion added to our GDP”, he said.
Oluwagbemi further called on Nigerians to embrace the new initiatives by the Federal Government as part of palliatives to cushion the effect of the removal of fuel subsidy in the country.
The representative of BOVAS Filling Station, a private investor in the Presidential CNG Initiatives, Temitope Samson, said, “We have worked with the regulators, we are also working with the Presidential Initiatives on CNG to make sure that standard safety is adhered to. We have also worked with the Standard Organisation of Nigeria to ensure that we have a standard accepted internationally.
“Our role is to ensure that there is availability of CNG across the nation, and to also ensure we have enough kits and tanks that are converted for people to use as many as possible, and to ensure safety and to train others so that anywhere they get to, they have very safe conversion”.
Recall that last year, President Bola Tinubu approved the Presidential Compressed Natural Gas initiative(PCNG-i)
This initiative aims to not only introduce more than 11,500 new CNG-enabled vehicles and provide 55,000 CNG conversion kits for existing vehicles that depend on Premium Motor Spirit but also promote local manufacturing, assembly, and job creation.