Kingsley Nkemneme
Electricity theft is one of the several challenges facing power distribution companies in Nigeria. Electricity or energy theft is the practice of bypassing, stealing or using electricity without paying for it. Electricity theft leads to commercial losses that adversely affect the operations of power distribution companies in Nigeria. This trend is one of the major causes of revenue losses which increases the debt profile in the Nigerian Electricity Supply Industry (NESI) negatively impacting the nation’s economy. A 2017 BusinessDay report revealed that distribution companies lose over N174 billion yearly to meter bypass, illegal connections and electricity theft.
Electricity theft depreciates the financial sustainability of the power sector and hinders new investment in the sector. It affects the ability of distribution companies to meet up with their financial obligations, service quality improvements and network expansion plans. It also affects other parts of the value chain; the consumers, Generating Companies (GenCos), and Transmission Company (TCN) as they receive insufficient payments for power generated, and are affected by the liquidity challenges in the sector.
The most common form of electricity theft in Nigeria is meter bypass and illegal hook connections.
An illegal hook connection is done by hooking up a service wire (that may or may not be appropriate) on overhead electricity cables usually after being disconnected. This act is likely to affect the quality of supply on the network and also increase the load on power distribution substations. As they are not legally connected to the network, they may cause the load capacity of the transformer to be exceeded. The act also increases the electricity bill charged to unmetered customers connected to the network.
Meter bypass is a deliberate attempt to shortchange power distribution companies by tempering with or distorting the prepaid meter installed for customers. This act results in the unsettling of meter readings such that it does not capture the actual energy consumption of a customer, causing them to use energy without paying for it. For example, in Yola Electricity Distribution Company franchise area (even with the on-going efforts to implement the new Meter Asset Provider scheme) more than 50 per cent of customers that are metered engage in meter bypass.
One of the reasons for this trend in our society is because customers do not consider electricity theft as unethical rather they feel it is their fundamental social right to have access to electricity without paying for it. We cannot have a sustainable power sector in Nigeria without tackling widespread electricity theft in the country. Energy theft in Nigeria has always been a major problem, and when the body responsible for regulating the power sector (NERC) was formed one of their core mandate enshrined in Electric Power Sector Reform Act (EPSRA) section 96 (1) was to come with REGULATIONS TO DETER THE THEFT OF ELECTRICITY, THEFT, AND DESTRUCTION OF ELECTRICITY SUPPLY INFRASTRUCTURE, AND PENALTIES FOR SUCH THEFT AND OR DESTRUCTION FOR ELECTRICITY OFFENCES.
Furthermore, Section 94 (3) of the Electric Power Sector Reform Act (EPSRA) provides that ‘Notwithstanding anything contained in any other law, any person who willfully destroys, injures or removes equipment or apparatus of a licensee commits an offence and is liable on conviction to imprisonment for a period of not less than five (5) years and not more than seven (7) years. Despite the existing regulations and laws, electricity theft remains a source of concern in the Nigerian Electricity Supply Industry.
It is therefore the collective responsibility of all stakeholders to undertake an aggressive campaign on the hazards and impact of electricity theft. Power Distribution Companies (DiCcos), need to undertake an aggressive awareness campaign on the implication of electricity theft. Customers and communities need to take up the responsibility of promptly reporting energy theft to the appropriate authorities. Failure of collective synergy among stakeholders to address this problem would translate to a decrease in power sector sustainability, lack of improved and expanded distribution network, delayed replacement or repairs of faulty transformers, as well as impact the provision of other essential services.
It is important to note that cooperation rather than competition among various stakeholders would yield a more positive result. Also, there is a need for the enforcement and review of extant regulations, laws, and policies to tackle this menace head-on. One way to do this is via the establishment of special or power utility courts to prosecute electricity theft offenders in a timely fashion to serve as a deterrent to others.
While bridging the metering gap will help reduce losses associated with collections, it does not eliminate all instances of theft as empirical evidence shows that even metered consumers steal energy. A meter-based solution would demand the deployment of smart meters with associated Automated Metering Infrastructure (AMI), anti-theft cables and advanced monitoring technology that would automatically indicate in real-time any possible infraction on the network.
Curbing electricity theft will go a long way towards efficient use and energy audit, improved financial status, and viability of the power sector value chain that would translate to the economic development of the nation.
Kingsley Nkemneme is the Senior Manager, Corporate Communications for Yola Electricity Distribution Company