NERC AND PHCN ARE USING THE MONTHLY ELECTRICITY FIXED CHARGES TO IMPOVERISH NIGERIANS AND RESIDENTS

A media release issued on 27^TH August, 2013, in Owerri, by Citizens Centre for Integrated Development and Social Rights – CCIDESOR, in response to the fixed charges on electricity consumers in Nigeria

Dear compatriots, it is time to get counted or get thrown into perpetual darkness and hardship by the ugly development in the electricity reform agenda currently being superintended by Nigeria Electricity Regulatory Commission - NERC. It seems that the reform agenda has been hijacked by those who don’t mean well for Nigerians. The latest antics to rip-off unsuspecting Nigerians, whose oil resources have been corruptly mismanaged,  is the 419 like fixed electricity charges endorsed by the NERC. Nigerians should recall that, so far, the only visible achievement of NERC and the entire electricity reform agenda is the regular increase of electricity tariffs. This exploitative increase has impacted negatively on over 150 million citizens since its introduction, with millions of families preferring to stay in darkness than pay for electricity they did not consume.

It will be recalled that the idea of fixed charges was introduced after the prepaid meters regime came into existence. Before, PHCN has been exploiting citizens through the monthly unmetered estimate billing system, until the prepaid metering regime, which insulated the citizens from the open and age long fraud against citizens came into existence. This confirms the position of CCIDESOR that Nigerians are being impoverished through all government monopolies like the power sector. It is something that did not start today.  In other to continue with the exploitation of Nigerians, the monthly fixed charge for metered customers was introduced through the back door, with the plausible reasons of trying to make the sector “attractive” when Nigeria already has a huge market that is more attractive than free “revenue” for new owners who appear incapable of satisfying the energy needs of Nigeria. This increment coming on the heels of selling the investment of many communities, philanthropists and individuals, who decided to fund the purchase of facilities to ensure that their communities get the epileptic power supply that government was unable to get to their communities, without offering them any stake to the tune of their investment, or asking them to withdraw their investment.    This is happening under the noose of an experienced and revered human rights activist who is the current chairman of the electricity reform agenda of Government.

It is important to note that since the commencement of the electricity reform agenda, the quality and quantity of electricity delivered to the helpless and hapless Nigerians remains perpetually and abysmally poor, while the level of hardship and impoverishment is on a steady increase. The latest increase of misery of Nigerians, in form of fixed monthly charges of N750, whether electricity is supplied or not, is regressive, ignominious, and an open day rip off of the already bleeding Nigerians. The introduction of this monthly fixed charge is an indication that the NERC has no new ideas to drive the electricity reform process. At this point, they need to pack their bags and go, than to remain in existence to inflict more pains on Nigerians and residents.  Now is the time for Nigerians to see the electricity reforms for what it is and what it has been – perpetuating the pain of Nigerians through high cost and exclusion. What is the rational to charge a consumer a fixed rate of N750 when NERC know that PHCN have not offered any service to the person? How would the electricity reform empower Nigerians when the philosophy behind it is total exploitation and enticing of investor with increased charges and not the potential population of electricity consumers? It is therefore time for EFCC and ICPC to probe the electricity regulatory agency because what they are indulging in is not different from economic crime against citizens. Making a consumer of PHCN electricity to pay for services that are not rendered or received is akin to economic crime against citizens.

An inquiry over the fixed charges increment alleges that it will be used to repay the cost of recently installed prepaid meters. This plausible explanation, which has not been confirmed by NERC or PHCN, clearly indicates that they may inflict more economic and social injuries on Nigerians if this trend of using electricity monopoly to impoverish Nigerians continues. The following issues should be considered if the electricity reforms means well for Nigerians and electricity consumers:

·         All consumers are not using the same capacity of prepaid meters. While some have “three face” meters, other have either two or one face meter. How can all of them be made to pay the same fixed monthly charge?

·         What is the cost of the prepaid or regular meter and who fixed the rate? Why was Nigerian electricity consumers not consulted on the price of a meter?

·         After paying off the full value of a prepaid meter, who owns it, the consumer or the future private owner PHCN?

·         If a consumer leaves a particular house for another, is he/she entitled to leave with is meter, how will the transfer of ownership take place, particularly if the new apartment has no prepaid meter?

·         Can someone who is not producing any product entitled to any revenue other than a philanthropic gift?

·         Does it mean that Nigerians are not good enough to receive detailed explanation on this demonic fix charges or has electricity consumers been censored from negotiating a product that they want to purchase?

·         What is the rationale behind making the sector attractive only by exposing Nigerians to exploitation and rip-off by prospective investors instead of ensuring that they sale whatever energy they produce?

·         Why is the population of Nigeria not enough to make the price of electricity low and the sector more attractive?

There are so many questions begging for answers to clarify the longsuffering Nigerians, who have remained exploited since the establishment of NEPA now PHCN and NERC. The reform has just shown that it is not meant for 150 million poor Nigerians. This increase is an invitation of more poverty to unsuspecting Nigerians and should be totally rejected. It is more shocking that this anti-people electricity charges is being endorsed by a commission headed by a renowned and well respected “former” Human Rights activist. It is unfortunate that it is perhaps only in a country called Nigeria that a Human Rights Activist who knows the implication of this injustice by his commission takes undue pleasure in inflicting needless and huge economic pains on Nigerians.

To confirm our position, the history of power sector fixed charge increment since the power reform started shows the steady increment has been worse than what has happened in the petroleum sector, yet NLC has not gone on strike.  The economic burden of fixed monthly electricity charges is presented thus - N120 in 2008, N85 (the only reduction) in 2009, N245 in 2010, N300 in 2011, N500 in 2012 and now N750 in 2013. This is a clear testimony of lack of ideas to wake up the dead sector. With this new fixed charges of N750 per metered consumers per  month,  PHCN wrongly generates over N360 billion Naira annually for providing no light to about 40million estimated electricity consumers. This is millennium impunity by NERC that should be stopped without thinking twice. Sad enough, while the crazy fixed and its increment is going on, the national Assembly that is supposed to protect Nigerians against any form of exploitation are busy voting to award themselves life pension and the fattest salary any legislator can earn around the world.

The fixed charge and its increase is simply another way of sustaining the ripping off of citizens by the old electricity regime which Nigerians hoped that the prepaid meter system would have wiped out. Ever since the government announced that they are embarking on electricity reforms as a solution to the identified economic woes Nigerians suffer due to inadequate power supply, the commission and its agenda have been suspicious because of the negative history of that sector, which has been adjudged as the most corrupt sector in Nigeria. The myriad of corruption scandals that have trailed the power sector from inception of Chief Obasanjo led administration till today testifies to the fact that corruption in the electricity sector is beyond appreciation.

In line with the recent MYTO, the government is supposed to subsidize the cost of electricity; but what we have witnessed over a sad period of time is that the subsidy has been phased out and replaced with official exploitation. It was based on this reasoning or initial explanation that the initial amount of N110 billion provided by the government for onward disbursement to the eventual operators through the Central Bank of Nigeria before the Yar Adua regime halted the privatization process.   This did not correspondingly stop the exploitation of Nigerians through incessant electricity price increases which has risen to over 600% since four years now. With this effortless and fraudulent way of generating revenue as well as the new tactics of fixed charges, there is certainly no hope for improved electricity delivery to Nigerians. Rather, there is confirmed fear of increased poverty, unemployment, insecurity and lower standard of living of Nigerians. Prepaid metering, which could have cushioned the consumers against this unbridled rip-off, seems to have been completely abandoned, thus leaving electricity consumers in the lurch. This sad situation is against the intentions of government which motivated the injection of over $4.billion into the power sector in the last nine years.

 The new traffic regime and fixed charges have clearly shown that such huge expenditure of about $40billion in the sector is simply fraud, waste and abuse of public resources. While every public expenditure is meant to benefit citizens the expenditure in the power sector has caused more pains to Nigerians than can ever be imagined in any sane society.

We are aware that most of the unbundled components of the electricity sector, particularly at the distribution level, have been finally sold by outright confiscation of the investment of many communities (particularly in the southeast) in the purchase of transformers, poles, wires, etc., the electricity commission do not think that such sacrifice is enough to attract investors and make the sector viable. It is also only in Nigeria that  with the pretense of electricity reform,  community efforts and properties can be easily and safely handed over to a private investor with the additional penalty of crazy fixed charges, yet it has been difficult for the private buyers to take off. For example, a recent rapid response survey of communities in the southeast conducted by Citizens Centre for Integrated Development and Social Rights – CCIDESOR, reveals that over 80% of distribution facilities that most communities use to supply of electricity are purchased or funded by either the communities or a philanthropist.  It is therefore unfair to punish the communities further with fixed charges.

It is on the above premise that we state as follows:

1. That the fixed charges per meter per month should be stopped immediately and victims of such rip-off refunded whatever they have paid to PHCN.

2. What is required to truly reform the power sector is to remove electricity monopoly from the exclusive list and put it in the concurrent list so that states that want to move faster can provide their people with twenty four hours electricity.

3. That NERC and PHCN should explain to Nigerians why over $40 billion expenditure in the power sector can only lead to increase in power tariff and fixed meter charged instead of lower tariff and improved power supply.

4. That the EFCC should intervene to protect Nigerians from this economic exploitation being perpetrated through the instrumentation of government commission. PHCN and NERC should immediately be charged of economic crime against Nigerians.

5. The National Assembly should also direct the discontinuation of that fraudulent practice to save Nigeria from impoverishment and other economic woes

6. NERC and PHCN should only generate money from power that the produce and not to make money out of nothing.

7. That NERC should be disbanded since their idea of improved power sector does not go  beyond increase in power tariff and monopolistic exploitations of citizens without delivering any improved service for the  years they have been in existence.

8. Unless this monthly fixed meter charge rip off is stopped and victim refunded, we shall commence the mobilization of Nigerians to reject the current exploitation embedded in the energy reform process.

The true economic reform of Nigeria can be achieved when those federal government monopolies that directly impact on the lives and livelihood of Nigerians are distributed among federal, states and Local Governments.