How 10 DisCos lost N155bn revenue to energy theft in 2018

May 6th, 2019

By Obas Esiedesa

Figures from 10 out of the 11 electricity distribution companies (DisCos) have shown that about N155.89 billion was lost in 2018 alone to energy theft in the power sector.

The amount represents about 70 percent of total Aggregate Technical and Commercial Collections (ATC&C) losses for the DisCos except the Yola Electricity Distribution Company.

Electricity theft are in the form of fraud (meter tampering or meter bypass), stealing (illegal connections), billing irregularities, and unpaid bills.

These actions do not only affect the revenue available to electricity supply value chain but also raises the amount paid by other paying customers

Electricity theft leads to misallocation of costs among suppliers, which can distort competition and hamper the efficient functioning of market operators.

For instance, the Ikeja Electricity Distribution Company (IKEDC) reported that 43,000 prepaid meters out of 134, 000 installed by the company have already been tampered with. The Port Harcourt Electricity Distribution Company (PHED) reported a loss of about 30 percent of expected revenue to energy theft. The distribution company noted that energy theft represented a huge revenue leakage to the company.

The Enugu Electricity Distribution Company (EEDC) reported a loss of about 43 percent of its expected monthly revenue to energy theft.

Speaking on the problem, the Executive Director, Research and Advocacy, Association of Electricity Distributors (ANED), Mr. Sunday Oduntan said energy is a big challenge in the industry.

According to him, “Energy theft is a very big problem in the electricity supply sector. Energy theft is very rampant. Even those who have prepaid meters, many of them bypass the meters. We did a survey some time ago in one of the DisCos where we installed meters and within two weeks 47 percent of the meters we installed were bypassed. So it is very major problem”.

Oduntan explained that about seventy percent of revenue losses in the sector are due to energy theft by consumers who bypass meters, engage in illegal connections or fail to pay their bills.

To check the menace, he called for a close collaboration between the operators, security agencies and the judiciary to ensure that more of those who engage in acts are punished and sent to jail.

“The law is there but the major problem is the issue of enforcement of the law. More people need to go jail and more people need to be convicted. If we have a good criminal justice system where people accused of offences are duly, diligently and quickly prosecuted and convicted it will serve as a deterrent for other people.

“In other word we need the cooperation of security agents and the judiciary for vandals and energy thieves to be brought to book.

“Secondly, we also need to up our game in terms of ensuring that our staff do not take part in these infractions. There is also the need for the public to give information, when you see something, say something” he added.

He said the DisCos are working with security agencies at different levels to ensure that perpetuators and brought to book and made to face the wrought of the law.

While acknowledging that there have been convictions, he lamented that the ratio of convictions was very low compared with the scale of the problem in the sector.

Also speaking on how the energy theft affects the operation of the Abuja Electricity Distribution Company (AEDC), the utility’s General Manager, Corporate Communication, Mr. Oyebode Fadipe said energy theft is having huge impact on the company’s revenue.

Fadipe energy theft is “one avenue through which the utility is experiencing financial hemorrhage because persons who have chosen this ignoble path of energy theft find easy access to the network. A major challenge today is the ATC&C losses. ATC&C means aggregate technical commercial & collection losses. While commercial losses include those who engage in energy theft, collection losses include those who willing decline to pay their bill at all”.

He said in 2018 the company had had 991 criminal complaints. Of this number, 106 went to Court while 23 convictions were obtained.
To solve the problem, AEDC he said, “adopted a multi-faceted approach. We are not just working with relevant security agencies especially Police & NSCDC, we also have a special in house unit that handles the issue of energy theft”.
Worried by the effect of the huge revenue loss to the sector, the Nigeria Electricity Regulatory Commission (NERC) approached the National Assembly last December to amend sections of the Electric Power Sector Reform Act, 2005.
The bill entitled ‘A Bill for an Act to prohibit and prevent electricity theft, power infrastructure vandalisation and power company protection 2017’, was presented by the Chairman, Senate Committee on Power, Steel Development and Metallurgy, Eyinnaya Abaribe to the Senate.

The Bill is seeking seven years’ jail term for anyone involved in electricity theft.

NERC claimed that stealing and sabotage were responsible for between 30 per cent and 35 per cent energy loss in the country.

Some of the objectives of the bill include amending Section 94(3) of the Electric Power Sector Reform Act, 2005 to curb and deter illegal and unauthorised use of regulated electricity supply as well as to protect electricity infrastructure.

It seeks also to punish any person found to have engaged in illegal use of electricity and destruction of electric power infrastructure.

The bill provides in Section 94(3)(a)that “Any person who willfully taps, makes or causes to be made any connection with overhead, underground or underwater lines or cables, or service wires, or service facilities of a licensee; or (c) damages or destroys an electric meter, apparatus, equipment, wire or conduit or causes or allows any of them to be so damaged or destroyed as to interfere with the proper or accurate metering of electricity shall be guilty of an offence punishable with terms of imprisonment for a period of not less than six months and not more than two years or a fine of N100,000 or both.”

Supported by Daily Trust Foundation and MacArthur Foundation

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