Electricity distribution companies (Discos) in Nigeria have said that over 40 per cent of the country’s citizens who use their services do not pay for them every month, thus accumulating for them over N30 billion worth of financial loss.
The Discos equally claimed that they lost an average of N500 million each during the period the federal government imposed a lockdown on the country to prevent the spread of Covid-19.
The Discos explained that often, this set of electricity users engage in energy theft, meter by-pass, vandalism of power distribution assets as well as willingly choosing not to pay off their monthly bills.
According to the Executive Director for Research and Advocacy of the Discos umbrella trade body, the Association of Nigerian Electricity Distributors (ANED), Mr. Sunday Oduntan, the Discos made this known to the Senate Committee on Power which had a public hearing on the state of Nigeria’s electricity industry.
Oduntan explained that the challenges form the major part of the Discos’ Aggregate Technical, Commercial and Collection (ATC&C) losses.
He noted that the Discos want an effective legislation from the National Assembly against energy theft to safeguard revenues and improve service performance in the sector.
“There is a need for effective legislation by the National Assembly to checkmate energy theft in the country as the practise is costing the power sector billions of naira monthly. The power sector is currently grappling with a liquidity shortfall of over N1.5 trillion occasioned by a combination of adverse conditions among which is the high rate of energy theft,” said Oduntan.
He stated that: “Recently, one of our members had to publicly declare how much they are losing monthly from energy theft. They lose N3 billion monthly. That is a lot of money and this is from people who illegally bypass their connections, those who take energy from the grid without paying as well as those who engage in acts of vandalism.”
According to him, the Discos during the public hearing of the senate showed an instance where out of N27.7 billion which was billed for energy consumed in 2019 by unmetered customers, only N5.2 billion was recovered.
“On (the) average, each Disco loses about N3 billion every month on these challenges and for the 10 Discos who are our members, the monthly losses are over N30 billion.
“The Discos are struggling to improve revenue collection but there are over 40 per cent of their customers that hardly pay for the electricity that they consume. Some of them are involved in the by-passing of meters and even outright energy theft.
“The sector cannot continue like this. There is no sector in the world where criminal acts affecting critical sectors are not given special treatment. Until people know that there are penalties for the specific crime of energy theft, this is not going to stop,” he added.
Oduntan further stated that: “On the part of the Discos, we are working hard to ensure the availability of meters so that there is greater transparency which will certainly build customer confidence. However, this has to be complemented by specific legislation.
“Everywhere you go today, the incidences of meter bypass is rife. If people are metered and they still steal energy, it shows you that the problem is not entirely availability of meters. There is a mindset that stealing electricity is okay and that needs to be corrected through the enactment of appropriate legislation.”
He noted that the practice of non-payment for electricity bills got worse during the lockdown imposed by the federal government to curtail COVID-19 spread in the country.
According to him, from April 2020 when the lockdown kicked off, the Discos lost an average of N500 million a month in revenue due to customers insistence on free electricity supply.
He said ANED was in collaboration with security agencies in the country and the judiciary to enforce legal actions against energy theft.
