PHCN fleece Nigerians of N3.41trn/yr on electricity bills

…Airports pay N130m, banks’ branches – N85,000 monthly…PHCN, conduit pipe for looting – customers

The Federal Government through the Power Holding Company of Nigeria, PHCN, is fleecing Nigerians of about N3.41 trillion ($19.6 billion) annually through outrageous electricity bills, which is not commensurate with the amount of power supplied to consumers.

According to investigations by Sweetcrude, PHCN collects about N1.04 trillion annually from households in Nigeria, N2.074 trillion annually from Micro Small and Medium scale Enterprises, MSMEs; N2.86 billion from the 22 federal airports across the country  and N3.4 billion from banks and other large scale enterprises.

However, the amount collected by PHCN from federal and states, parastatals, ministries, Departments and Agencies of government; the 774 local government offices across the country; Police and military formations, state-owned airports and almost a hundred airstrips across the country among others could not be obtained.

Further investigations revealed that households pay an average of N3,000 monthly as electricity bill, whether there is power supply for the whole month or not; Micro Small and Medium Enterprises, MSMEs, pay an average of N10,000 monthly; banks’ branches pay an average of about N45,000 per month, while big businesses pay an average of about N100,000 per month.

The Kirikiri, Lagos, branch of one of the new generation banks with presence across Africa, told SweetCrude that it pays an average of N85,000 monthly as electricity bills, while the Berger branch of an old generation bank also disclosed that it pays an average of N45,000 every month.

A senior official at the Federal Airport Authority of Nigeria, FAAN, who chose not be named, told SweetCrude that an average airport, like the Lagos airport, pays an average of N130 million monthly as electricity bills.

Data breakdown
From the 1996 population census figures, Nigeria has about 28.9 million households, while the 2010 National MSME Collaborative Survey, published jointly by the Nigerian Bureau of Statistics, NBS, and the Small & Medium Enterprises Development Agency of Nigeria, SMEDAN, put the total number of MSMEs in Nigeria at 17,284,671.

According to the report, the total number of micro enterprises stood at 17,261,753, Small 21,264 and Medium 1,654, totaling 17,284,671.

Also, data from the Nigerian Stock Exchange, NSE, revealed that there are 198 listed companies as at December 31, 2012, while data from the Central Bank of Nigeria, CBN, showed that there are 22 banks in Nigeria having 5,810 branches across the country as at December 2011.

PHCN earnings 111% higher than 2013 capital budget
Further analysis shows that the N3.41 trillion earned by the PHCN annually is 110.5 per cent higher than the N1.62 trillion budgeted for capital expenditure in 2013 and 43.28 per cent higher than the N2.38 trillion budgeted for recurrent expenditure.

The amount is however, 31.62 per cent less than the total 2013 budget figure of N4.987 trillion. Despite this huge sum generated by the PHCN annually, the organization still complain of inadequate funding and lack of funds to carry out projects capable of ensuring steady power supply in Nigeria.

Nigeria require N954bn annually to fix power
A panel set up by late President Umaru Yar’Adua in 2007, led by Mr. Rilwan Lukman, had in 2008, when submitting their report, declared that Nigeria’s short-term goal of 6,000 mega watts by 2009 would cost the country about N477 billion ($3 billion).

Also, the Federal Government, under President Goodluck Jonathan, had in 2008, said it requires N954 billion ($6 billion) annually to fix the country’s epileptic power situation, stating however, that it can not afford the amount.

Mr. Nuhu Somo Wya, the then Minister of State for Power, who disclosed this during a facility visit to one of the country’s power plant, said, “Nigeria would require $6 billion annually to meet the aspirations for the actualisation of vision 20:2020 through sustaining the electricity needs of the country. However, government does not have this kind of money to power the energy needs of the economy hence the resort to seeking the intervention of mega financial institutions on the energy crisis.”

The N3.41 trillion the PHCN gets from Nigerians as electricity bills annually is 257.4 per cent higher than the N954 billion the Federal Government said it needs annually to fix the country’s power situation.

This has raised concerns as to how the funds generated by the PHCN from consumers are being utilized, especially in the wake of poor service delivery and erratic power supply.

PHCN exploiting Nigerians
Respondents who spoke to Vanguard are of the view that PHCN is an exploitative agency of government and that the organisation still exists because it is a major revenue earner for the government.

They are of the view that irrespective of whether there is power supply or not over a long period of time, PHCN officials still distribute bills to consumer, adding that they even pay more during periods of darkness.

Consumers pay bill before consumption
PHCN is the only public utility company that forces consumers to pay for services not yet consumed and delivered. Most times, even after payment, PHCN officials still disconnect consumers, for flimsy excuses, such as that the customer failed to display the evidence of payment among others.

In most areas, PHCN brings bills for a particular month at the first or second week of that same month, while most times, they warn customers to pay before a certain time, usually within one week, or risk disconnection. This means that people pay bills for a particular month before the end of the particular month.

One wonders then, how PHCN comes about the amount with which they bill consumers. Electricity consumers are left at the mercy of PHCN marketers who respondents say, are mostly corrupt.

Customers’ react
One of the respondents, Mr. Lucky Oha, lamented the exploitative billing pattern of the PHCN and called for a transparent billing system that will see consumers taking their meter reading in conjunction with PHCN.

According to him, his area in Wilmer Crescent, Olodi-Apapa at Ajeromi-Ifelodun Local Government was without electricity for about three months, between January and March 2013, yet, PHCN officials still billed him and even jerked up his bills.

He said, “PHCN officials brought bills for January which we paid for; but they did not bring bills for February, maybe because they are afraid they would be attacked, especially as they did not supply electricity to the area throughout the month of February.


*PHCN transformer


“In March, they restored power to the area for about one week, giving them an excuse to distribute bills to consumer. When we got the bills, our amount payable almost quadrupled from about N3,500 to almost N12,000.

“When we went to complain, we were told they added the cost for the month of February. This was in spite of the fact that we were in darkness throughout the month of February.”

He expressed sadness at the manner at which PHCN officials treat consumers and the rate at which it bill customers, without recourse to consumption.

Particularly, a customer, Mr. David Adonri, said he is currently been owed about N85,800 by the PHCN, due to an overcharge of about 9,800 units of electricity he said he did not consume.

According to him, the overcharge is due to the difference between PHCN’s officials’ estimated meter readings and his actual meter readings since 2008.

He said, “Within this period, I wrote seven letters of complaint to Shomolu District. They did no reply but their personnel responded occasionally by disconnecting my power supply despite their indebtedness to me. Meanwhile, several consumers who do not pay their bills but ‘settle’ PHCN marketers unofficially, continue to enjoy frequent power supply.

”While my area in Bajulaiye Road, Shomolu is perpetually starved of power supply amidst outrageous bills, the neighborhood around the market is usually favored with constant supply. When out of public power supply for several weeks due to breakdown of our transformer that was installed in 1962 at Emmanuel Kolawole junction, PHCN officials only restored power supply after extorting huge sums from the neighborhood.”

Also speaking, another consumer, Mrs. Bisi Bright, said there are a lot of leakages in the electricity system in Nigeria. According to him, a lot of miscreants and illegal operators circumvent the usual tariffs by ‘loading’ their bills into other consumers’ lines, leading to huge tariff at one consumer’s end; whereas the neighbors are paying much less due to ‘sharp’ practices.

Continuing, she said, “Electricity supply is erratic, epileptic, and undependable. It has destroyed several gadgets in my home, burnt too many bulbs, and intercepted several work-related processes. Consumption is poorly matched with bills due to an unfair process which allows some people to enjoy ‘nearly-free services while others pay through the nose.

Reacting to the huge amount raked in by the PHCN, annually from electricity bills, Bright said claims by PHCN that it is under-funded are unjustifiable. She advocated a sanitization of the electricity sector, to ensure that it is leak-proof, credible and fair.

According to her, they should look into the leakages in the system and block all leakages and intangible wastes especially corruption and recycling.

PHCN a conduit pipe to looting Nigeria’s treasury
Continuing, Mr. David Adonri, who is also Managing Director, Lambeth Trust and Investment Limited, said it will require several pages of narration to dwell on the intense corruption, technical incompetence and inefficiency of PHCN.

According to him, it is common knowledge that this failed and rotten organization, like several other state enterprises have from time past, served as conduit pipes through which public officers loot the national treasury and staff to stupendously enrich themselves.

He said, “Nigerians were liberated from similarly wicked conditions when the telecommunication industry was deregulated few years ago. Every minute of delay in privatising PHCN and deregulating the electric power industry increases the anguish of Nigerians who are now faced with deteriorating power supply since exit of Professor Nnaji as Minister of Power.”





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