Ola Ayodeji is the Chief Transformation and Strategy Officer of the Ibadan Electricity Distribution Company (IBEDC). In this interview by SULAIMON OLANREWAJU and KEHINDE OYETIMI, he speaks on the controversy surrounding the Elebu pilot scheme, meter bypass and the innovation that the company is bringing to its customers.
There are complaints from Elebu, in Ibadan, that you intend to run a pilot scheme. Could you give a background to this?
Essentially as a business, we decided to commence what we refer to as asset and customer enumeration. This is partly a directive from the Nigerian Electricity Regulatory Commission (NERC). As a business concern, we realise that we need to know our customers. This is what should have been done ab initio. This ought to have been done before we took over. For several considerations, we didn’t do that immediately. In line with NERC’s guidelines, you have to determine your assets first before your customers because your customers are tied to the assets. When we talk about the assets, we are talking about the distribution transformers, meters, infrastructure network. What NERC is doing across the DISCOs is to have customer identification number. This is almost similar to the Bank Verification Number used in banks. With that, we will be able to address our customers and know where the faults and issues are or whatever concerns that come with that.
That is the background to the whole of it. Before we could commence, we said we needed to do a pilot scheme. From the pilot scheme, we will be able to drive the business across our region. It took us a while to get the contract awarded and the process of doing due diligence. We were able to do that and also agreed with the special project vendor and a mix of finance. If you know the bane of the sector, you will know that finance is a major thing. We had to be able to work with someone that could leverage on their capacity to do what we want and at the same time based on phased payment. And we agreed that we were going to take Elebu which is closer to our HQ. By that, we will be on ground and actually know what exactly the situation is and have a hands-on grip of what the facts are and be able to cascade that across our franchise.
Again when we were looking at Ibadan, we considered a growing community where you would have a mix of the rural, middle and urban classes. By this, we would be able to pick so many pieces of information from just that pilot exercise. That was how we ended up with Elebu. We completed the asset enumeration. We also carried out sensitisation in relation to our customers. This is to make them realise what we are doing. Our people usually feel that we are out to frustrate them by taking their meters and giving them new ones that would make them pay unnecessarily. Over time, we have been able to address this fear. Our people have not been used to the consumption pattern. Metering justifies consumption. As long as you can justify the integrity of the meter, what you use is no longer in question. We felt that was the way forward and so we got our branding and communications unit to be able to sensitise the community that this was our intention.
As we speak, we are trying to do a test case within that community to show to them what we are doing. We realise that even if we bill all our customers 100 per cent, the energy that is being supplied to a particular area is not commensurate to the resources that we are likely to get. The issue that DISCOs are stealing money will be put to rest because we will be able to authoritatively show the data without necessarily saying what we know. We are carrying out three projects. We are carrying out meter redistribution transformer itself. That will lead us to knowing where the energy theft is or those that are consumers and not our customers. Whoever is not paying is referred to as consumer as opposed to our customer. For you to be our customer, you get a bill. It is evident that most of the consumers are not on the DISCO’s data base, otherwise why should we be having under 4 million consumers in the whole of the federation. It is an anomaly. That is why NERC itself is forcing enumeration. If we can get most of this people in, then there will be even payment and as a result we will be able to get enough resources.
Again, generally most of our customers say they want prepaid meters. From the benefit of hindsight and historically, most distribution of power sectors realised that when you introduce prepaid meters, revenue drops. Because it is prepaid, people get conscious of consumption and they thereby reduce usage. Then we discovered that prepayment leads to more bypassing. If we meter the distribution transformers, at least we can audit and know what energy has gone to a particular area and from there we can then see the bills that have not been issued. We will know that within that locality there is an issue and we can then send our team to go and look at what is happening. We have decided to do a mix: post-paid metering, prepaid metering and also metering the distribution transformers. By this, we will be able to have real case scenarios.
For us as a business concern, if we have our choice, we want to go the way of the post-paid meters because the cost of the prepaid meters is almost that of the cost of the post-paid meters. And knowing that the metering gap is huge, we are mindful of finances. Most consumers and the authorities perceive that we are better off giving the consumers prepaid meters. We realise that everybody cannot be on prepaid.
How does the post-paid arrangement work?
The post-paid meter is the meter. You pay after you use. The difference is that you either pay before or after usage. After usage is what many people are used to. A reading is taken at the end of the billing circle, possibly at the end of the month. We look at what is consumed, issue out the bill to you and you pay. From an accounting and management point of view, it pays to pay me before you use as opposed to getting you to pay after your consumption. The chances are that if the customer does not pay, then we can cut them off.
One of the issues raised by your customers in that axis is that you are taking them back to the past. They were on post-paid, you took them to prepaid and now you are taking them to post-paid. Is there no way you can stop people from bypassing instead of going back to post-paid?
There is nothing that is not doable. But as stated by law, we have the right to proffer what is best for the business. If we believe that it is with the post-paid meters that we can get the best for the business, as long as the integrity of what we are giving to you is not in doubt, that is what we will do. Our business model is ours to determine. We do not like to go back and forth but like anything else when we came into this business, we looked at what would be right and sustainable. By the time we talk about smart metering, customers do not want to pay for meters. Who owns the meter? Who pays for the meter? We know full well that we do not have a cost effective tariff which we all have been clamouring for. This ought to be reviewed biannually. It has been reviewed but not effected, imagine the constraint on us. We inherited 570,000 meters from PHCN. Of that, 70 per cent are obsolete. Literally speaking, we are operating with about 120,000 meters plus whatever it is that we have been able to do. We do not want to be in a situation where we are arguing with the customer. It does not make economic sense and it is not customer friendly. Customers advanced payment when buying meters and are refunded with energy. In the real term, we pay for the meters. That was scrapped and that put the pressure on metering the customers. By the time we finish this enumeration exercise, judging from the result of the pilot scheme, we will probably end up with over 4 million customers. Currently, we are about 1.3 million as inherited but we know that we will be looking at 4 million. Add that to the customers that need to be metered. By the time we do the maths, we will be looking at N60 billion just for metering; we have not talked about infrastructure; we have not talked about running the business; we have not talked about the backbone element of doing the business. Where will such amount of money come from without a cost effective tariff? These are the constraints we are faced with in the industry.
There are some areas that have not been captured by IBEDC. They have energy; they are consumers but not customers. What are you doing about that?
That is the whole essence of the project. The asset enumeration has been done across our franchise. We are moving on to our customers. It is a validation of our customers. On our data base, we have close to about 6,000 registered in Elebu. But by the time we finished the building footprint there, we realised over 130,000. But that is just the building footprint. It does not necessarily mean that all are our customers. But in some houses, you can have multiple users. We realised that 40 per cent of the customer-base are not registered. As we are capturing it, we are cleansing the data and upgrading it. We are writing the appropriate names; we are including accounts and telephone numbers and email addresses. We are trying to bring them on board so that at least we can relate with our customers. Everybody has gone digital. There should be a relationship between the customer and the utility. This exercise will bring many of the people on board. It will take a while. It will take about 18 months.
What other things have you discovered in this pilot scheme aside bypassing?
It is a customer-based thing. We are looking at our poles, lines, conductor wires, transformers. It is not just about documentation; we want to know the state of our assets. Information is what guides us to be able to do the appropriate thing. Then, we are looking at addressing the issue of people moving from one phase to another phase or line when there is power outage. It will always cause overload. All that will not happen again. There must be a balanced load. When people do such things, it puts pressure on us. In the midst of it, we will get complaints. But we know that a huge chunk will work with us. We are having community engagement. So far, so good.
One of your customers has taken you to court over the Elebu pilot scheme. What is your reaction to this?
That says something about us. Did we communicate effectively? We probably could have and yet find a disgruntled customer. Without necessarily being defensive, we realise that even when we communicate effectively, some of these customers are not used to making payment. Whoever has taken us to court should let us know what the facts are. Where did we err, if at all we did? Even now, the due process says that before you go to court, there should be an alternative dispute resolution. This is the whole essence of establishing NERC but if we are not able to address it then you can go to court. I am sure the judiciary will address the consumers on the way to go.
The post Why we are engaged in asset enumeration at Elebu Ibadan —IBEDC appeared first on Tribune.
Source Tribune
We appreciate you for reading our post, but we think it will be better you like our facebook fanpage and also follow us on twitter below.