Over the years particularly since 1999, the Federal Government of Nigeria has been making concerted efforts to stabilize the power sector of the country.
The successive governments have made promises upon promises to Nigerians giving time frame within which to solve the power problem and to this day have failed on each occasion.
This is not because they were playing lips service with it or were not serious but that they were not aware of what exactly to do to solve this problem.
Earlier, the government thought that the problem of the power sector was solely the people running it. As a result of this, on many occasions, some very experienced and knowledgeable officers in the sector particularly in the then NEPA were sacked but as these people were being sacked and new people used to replace them, the problem remained. The government then realized that the cause of the problem was not just the workers but mainly the infrastructural decay and inadequacies in the sector.
The government then set up a program (named short term program) which enabled her to inject fund into the infrastructural strengthening and rehabilitation of the generating stations, transmission and distribution networks and substations. The Ministry of Power and NEPA members of staff were used to execute the program. This lasted for more than a year before accusations of embezzlement distracted the government from it.
This program actually helped to improve on the quality of supply to Nigerians. The improvement could not last for a very long time because of the quality of materials, tools, equipment and machineries purchased at that time. Some of them, because they were considering cost were purchased from Asian countries and the contracts for both purchase and construction works were awarded mostly to their political boys. The politicians intimidated the drivers into using their representatives to do most of the jobs. It was very difficult for any one to reject these materials and projects and so they were accepted and put to use, as they came, without proper inspections and supervisions. More so, the need for these items was very important and urgent at the time and so no time for argument with the suppliers and even if there was such time no one had the courage to engage in it.
For instance on many occasions a new brand 15MVA, 33/11KV power transformer at the point of powering would just fail. Some fail sometimes after they had been commissioned. Even with these set-backs, the program was a blessing to the power sector of the country. What we needed to do then was simply to find out where we did not do well and improve on them but because of accusation of embezzlement on the officers and Government officials who carried out the project, the attention of government was diverted to the possibility of reforming and privatizing NEPA to enable the private companies who will buy the successor companies that will emerge from the reformed NEPA provide the required huge sums of money needed to rehabilitate strengthen, stabilize and expand the power sector infrastructures.
To achieve this the Government took some steps aimed at addressing the challenge and these include:
(!) Establishment of Bureau of Public Enterprises (BPE) to look into the power sector.
(2) Enactment of the Electric Power Sector Reform) EPSR) Act of 2005 which involved the:
(a) The restructuring and unbundling of Nation Electric Power Authority (NEPA).
(b) The establishment of an Independent Regulation Commission; the
Nigerian Electricity Regulatory Commission (NERC).
(c) Privatization of the Successor Companies emerging from the unbundled units of NEPA.
(d) Development of Power Consumer assistance Fund.
(f) Establishment of Rural Electrification Fund.
The reform Act was aimed at identifying the following challenges:
(i) Increasing efficiency.
(ii) Ensuring quality supply.
(iii) Introduction of competition.
(iv) Attracting private sector participation and investment.
After the necessary legal structures have been put in place leading to enacting of the Electric Power Sector Reform Act of 2005 (EPSR Act 2005) which empowered the transfer of National Electric Power Authority (NEPA) assets, liability and staff to an initial holding company called Power Holding Company of Nigeria (PHCN) which was to hold the assets liability and staff of the 18 companies resulting from the unbundling of NEPA until these successor companies can be privatized.

This was happening at the twilight days of the government in power then who had also noticed the terrible state of dilapidation of the power sector infrastructure, which is likely to be a source of discouragement to the prospective investors.
So, while these processes were still on, the Government realized that the power supply situation which improved after the short term program, has started dwindling causing the Federal Government, then under Chief Olusegun Obasanjo, to engage herself in one of the most ambitious and capital intensive programs in Power Sector investment in the world, to strengthen the network, improve on the quality of power supply to Nigerians and also make the companies attractive to the prospective investors. They also tried to engage in massive deployment of prepayment meters, but because of funding problems, this was not executed the way it was planned and became a source of worry to some of the distribution companies.
I believe they realized at the later days of their term that it is only after a reasonable stabilizing, strengthening and expansion of the power sector – infrastructure to the extent that its capacity and capability is robust enough to satisfy the power needs of Nigerians that we can think of privatizing the sector for the proper management of the sector in such a way as to sustain the performance and improve upon it. So they introduced this ambitious and capital intensive program called the National Integrated Power Projects (NIPP) managed by the Niger Delta/Power Holding (NDPH) company.
The NIPP project was to be the best thing that ever happened to the power sector of Nigeria because it was holistic covering generation, transmission and distribution sectors of the company. It was designed to build many new generating stations, (mainly gas) reinforce the existing 330KV, 132KV, 33KV and 11KV lines and strengthen the existing ones. It was also designed to rehabilitate the existing dilapidated generating stations, transmission stations, injection substations and distribution substations and also to build new generating stations, transmission stations and distribution substations. At the distribution level it was intended to remove most of the existing low voltage (LV) lines by converting the existing low voltage distribution system (LVDS) to high voltage distribution system (HVDS).
The HVDS will require that all the existing LV lines will be removed and many 33/11KV injection substations installed radiating 11KV lines which will go through the streets and small size completely self-protected (CSP) transformers (50KVA & 25KVA 11/0.415KV transformers) mounted on poles near the buildings. The 50kVA, 11/0.415KV single phase transformers were to serve not more than 10 customers, depending on their load demand, serviced from the transformers on single phase. The 25kVA, 11/0.415KV three phase transformers were to serve a customer on three phase wired building.
Possibly, the government also knew it will be waste of resources for us to make the infrastructure robust without being able to sustain it. The only way to do so is to generate fund from it and use it to maintain and expand it. So the idea of deploying the prepayment meters was brought up. This was the state we were when that government left the stage. A new government, led by President Yaradua, who promised us during his electioneering campaign that they were going to declare state of emergency on the power sector, came on board.
We believed that the president was honest and was truly committed to carrying out his promise. Our understanding of his declaring state of emergency on power sector was that he was going to come up with a legal backing to make enough funds available to enable him make massive investments in the power sector so that we can execute the NIPP projects and carry out massive deployment of prepayment meters and possibly, in his first term, change the fortune of the power sector but this was not to be.Another round of accusation on the officers running the NIPP program for embezzlement came up at the on set of the new government. Whatever their purpose for doing this was, it truncated the execution of these wonderful projects, in fact, the NIPP projects were abandoned for a long while. But after the death of President Yaradua and a little while later, when President Good luck Jonathan took the mantle of leadership, the executive arm of the government realized the importance of the NIPP projects and started funding it and continued to fund it even when eventually the successor Generating and Distribution Companies had been privatized
At present, most of investments in the power sector infrastructure development, in Nigeria, are made through the NIPP activities. Lack of fund has made it very difficult for the investors to inject enough funds for infrastructure rehabilitation, strengthening and expansion as required.
The investors, especially the Distribution company owners, could not determine the actual loss level of the companies they were intending to procure, before they put tenders for them because the workers Union did not give them the opportunity to do so. As a result of this the Nigerian Electricity Regulatory Commission (NERC) developed a tentative loss level based on which they put their tenders. This was done with the understanding that when they had taken over the companies they will then determine the actual loss for their individual companies. Unfortunately, the loss level given by NERC was realized to be lower than what was actually on ground for all the cases. As a result of this the MULTI-YEAR TARIFF ORDER (MYTO) 2 developed then as a cost reflective tariff to enable the companies operate in such a way to meet the customer electricity need satisfactorily and profitably could not serve that purpose.
When, later in 2014, the companies submitted what they determined to be their actual loss levels and NERC used it to carry out a review of the MYTO-2 tariff and FROM IT developed the MYTO-2-1 tariff which was released in December 2014, effective January 2015, their was a huge outcry from both Industrial and commercial customers who the tariff classes they belong to were affected, as that of the residential customers were postponed till June of the same year. Following the protest by these affected customers, NERC decided to reduce the increase, it made by half, and directed the Distribution companies to dialogue with their customer to reach a tariff that is acceptable to the two parties and submit to NERC for final approval. This has been done and based on it ,NERC released a new tariff regime in December 2015.
Now, with this new tariff regime released, will the Distribution Companies be able to summon enough money to be able to meet all their obligations?
No.
This is because before the Distribution Companies can make enough money to meet their obligations, two conditions must be achieved:
(!) Application of a cost reflective Tariff.
(2) 100% or near 100% customer payment of bills given to them.
Now, let us believe that the new tariff just released is cost reflective.
The customer’s payment response as at now is, in most cases, below 50%.
At this level it is clear that the Distribution companies cannot meet the gas purchase, generation, transmission , distribution and the other obligations and hence all the members of the power sector value chain cannot run efficiently, let alone making effective investment in infrastructural development because of very low cash flow or cash volume in their account records.
Every Business man depends on banks to fund his projects but the banks approve such request for loan if it is satisfied that the customer has a means of paying back. This is where the Distribution companies are having real issues with the banks. The low cash flow they are registering now, as a result of customers’ resistance to payment is discouraging the banks from lending money to them. Also, no wise business man is ready to invest his hard earned money on a project he is not sure he will be able to recover his money from.

This means that even with the tariff review, it is possible that the expected massive investment on the power sector infrastructure to engender an era of good quality and steady power supply to Nigerians, will remain a mirage.
Now, we have three types of losses in the Distribution network:
(!) Technical loss.
(2) Commercial loss.
(3) Collection loss.
The reduction of the technical loss is the most cost effective of the three, as it involves massive investments on the network infrastructure. Considering the quantum of money being realized in the power sector now, it will not be possible for any member in the value chain to be able to meet this expectation and this is likely to remain this way for a long time to come as no bank will be ready to lend money to them considering the prevailing high collection loss level.
Considering the above and noting the great positive impact good quality and steady power supply will give to the economic ( commercial and industrial ) growth, employment rate and reduction of crime rate in the country etc., we suggest that the government intervene by helping these companies in tackling the technical loss reduction in the sector in a holistic way.
To do this , we wish to suggest that the Government retain and strengthen the Niger Delta Power Holding (NDPH) company by increasing the funding of the company to enable it expand its investments in the sector especially on the Transmission and Distribution subsectors.
The companies will agree with the NDPH Company on where they want investment to be made in their network, monitor together that the works meet specified design standards and also how the company will gradually pay back the cost of the projects to the Government.
However, as this is being done, to avoid importation of varied substandard materials, tools and equipment into the country and the need to ease operation and maintenance, for the operators, we should design and develop Nigerian specification for all materials, tools, equipment and machineries that are to be deployed into the network of the Nigerian power sector. This will involve having a common shape, material standard and operational protocol for each item of materials, tools, equipment and machineries used in the power sector. This Nigerian specification will be given to the manufacturers of these items to use as standard for manufacturing items for use in the Nigerian power sector e.g. transformers, control panels, feeder pillars, ring main units (RMU), conductor, poles, gang isolators, cross arms(fiberglass, channel or angle irons), meters, J&P fuse, element fuses, etc.
A materials standards Department has to be established in each company to inspect any material entering their store to ensure they are in line with the Nigerians specification for the materials before they enter their store or are deployed into the network by contractors.
All manufacturers of equipment and materials for use in Nigeria must be made to produce them to meet Nigerian specification as stated above. The specification may be reviewed in future to meet new realities. In addition to this, the NDPH Company, through the Contractor handling the projects should arrange with the manufacturers of the equipment they are bringing in train the user staff of the companies who will maintain and operate the equipment. If these are done, the problem the operators are having in understanding the operational protocols of some of the equipment they operate (equipment imported into the country from all over the world manufactured in accordance with the specifications of the various countries) will be eradicated. Some suppliers go to foreign countries and bring in substandard materials, tools and equipment which fail a while after being commissioned. Some even import refurbished equipment and deploy them into the system. There should be enforcement of the law against such acts and also for tampering with Nigerian Electricity Supply Industry (NESI) materials and equipment in the network.
There should be a legal instrument to protect the staff of the electricity industry now being intimidated by influential and highly placed citizens in the society when they insist on standards.
As earlier mentioned the NDPH Company must ensure that the staff of the companies that will maintain and operate the equipment their contractors and suppliers procure for network strengthening and expansion are properly trained as part of the agreement in their contract document. This will prevent difficulties in the maintenance and operation of the equipment after they had been installed, as is being experienced in some cases today.
With this done the Distribution companies will be saddled with the responsibility of tackling the commercial and collection losses in their networks.
This will be done in such a way that even when the customer wishes to steal energy or avoid payment for energy consumed, he will not succeed and if he succeeds he will easily be fished out
.To tackle commercial loss, the Distribution companies must carefully and thoroughly, on a step by step basis, go through their area of coverage to ensure that every person connected to their network is captured into their customer data bank. To further reduce the commercial and collection losses, the Distribution companies should fix meters in customer’s premises in such a way that he cannot tamper with the meter or it’s connections or carry out any manner of meter bypasses even if he intends to do so.
We suggest that the Distribution Companies should arrange with meter manufacturers to produce meters in boxes of various sizes containing one, two, three or multiple meters to be fixed to buildings according to the number of apartments in the buildings to be metered.
The meter box for each building has to be installed, in front of the building, on a single or double pole structure, depending on the size of the meter box. Each box at the end of installation should be locked and sealed properly and the seal number documented.
The connection between the meter boxes of each building and the building should be done using multicore cables with tag numbers, at both ends of each core, to aid easy identification of customers’ meters. The multicore cable will be connected to a junction box fixed on a meter board in front of the building from where each core with a neutral line will be extended to the individual customer’s load wire.
We would want to suggest that the User Interface Unit (UIU) of each meter should be wirelessly linked to the meter to reduce multiple connections to the meters.
The Distribution Companies should not allow any electric wire to be connected to the buildings except the wires from the meters and should ensure that any defaulting customer is penalized accordingly.
OTHER MATTERS
People who have been confirmed to have tampered with the network beyond all reasonable doubt have to be prosecuted in an appropriate law court or be made to pay heavy fines. A legal structure should be put in place to handle this with appropriate sanctions involving fines and imprisonment. Such tampering involves meter tampering and by passes, illegal tampering with the LV and HV network for the purpose of working on the line without authorization and cases of vandalism. The punishment on this must be enforced on the culprit if we must succeed in this area.
Nonpayment of bills for credit meters will lead to arrests and prosecution leading to payment of specified fines and full payment of the outstanding amounts owed.
The use of contractors appointed by politicians because they are their boys will lead us back to square one because these contractors are not afraid of anybody because of their connections and so will end up sharing the money with their masters and using whatever remnants to do substandard jobs, if they will do the job at all. Only approved, certified and competent contractors, registered with the NDPH Company for its contracts or the Distribution companies for their contracts, should be used.
Thank you for your patience in reading through this article. It is our little contribution towards the improvement of the quality and reliability of power supply in Nigeria. We shall appreciate if the Government and People of Nigeria will consider our humble contribution worthy of trial. Thanks.

Chukwuemeka Emmanuel

The reason why we are in this situation is because we are not adopting common sense. Why should we have a pipe line running that far in the middle of poverty and expect peace to rain. It make sense to have a power city close to gas plants where different sort of commercial activities jobs will be happening we won't have the issues of pipe vandalism people will be too busy to be doing that.
We need to start proper investigation when such things occur. We need proper security around most of this plants an power wires. We lose more whenever there is no power. are been vandalised.
That is what you buy police helicopter for not for chauffeuring igp or taking pictures.

Secondly solar panel farms is the way forward. We want foreigners to come and invest in our power supplies but our own billionaires don't want to put there money down, even the thieves that looted our money so what gives us the knowledge that foreigners will like to invest in our unstable and unpredictable society. Dangote is not even biding.

Lalasticlala, mynd44, obinoscopy why hasn't this make FP since?