Mr. Abiodun Ajifowobaje is the Managing Director of Ikeja Electric. In this interview, he speaks about the state of the company’s network, its metering programme and other issues. STANLEY OPARA was there
How far has IE gone with its metering scheme?
The company has rolled out its Advanced Metering Infrastructure scheme. On monthly basis, we will be installing 12,000 meters. As soon as our contractors mobilize
more teams, we will be hitting 15,000 meter installations per month. After our 2,000 meter installations pilot scheme, we have already installed another 8,500. For October, we need less than 2,000 units to hit the target, and this will be achieved by the end of the month. We had earlier said we would install 10,000 meters for October. Going forward, we won’t do below the newly set target
Why the delay in your metering programme?
Aside from asking us why we started our metering scheme late, people had also asked why we were not leveraging the Credit Advanced Payment Metering Implementation scheme. The point is that we wanted to install meters that are futuristic. This is what the consumers stand to gain. A very good businessman who wants to succeed must study the situation on the ground, as far as his target market is concerned. He will then look at the way to better what is on the ground for the betterment of the customer and the company; not minding that the regulator is watching.
By the time we finished, we discovered that the best thing to do was to go on AMI. That means all the meters we are going to install are going to be smart meters. By smart meters I mean the meters that will be installed at residential and business locations, and could be monitored remotely from our office. A customer can also monitor how he/she progresses on a daily basis using the meter. For instance, if a customer intends to spend just N10,000 on a monthly basis, that could be achieved. The meters are installed on electricity poles or in the buildings.
How are you going to effectively meter all customers on your network?
We have drawn our timetable on how we are going to cover all our customers. In the first instance, we are going to meter 300,000 customers. But there is no way we can bring in all the 300,000 meters for installation in one month. There are some we are going to install now, and it continues until December 2016. We did say we would not allow anybody to jump the queue.
But there is a development now. Our Board has just approved that people who cannot wait are free to leverage our new CAPMI scheme. The fact still remains that the meters are free – whether through CAPMI or the traditional scheme. If you pay under CAPMI to speedily get the meter, we are going to refund the money over time. We didn’t plan for this before, but it is a reality we have to address. The procedure through which our customers can leverage our CAPMI scheme, will be made public soon.
The meters will help us minimise our losses, while also monitoring and managing consumers’ consumption.
Secondly, our Customer Enumeration, Technical Audit and Asset Mapping initiative is targeted at making every consumer of power within our network our customer indeed. This initiative has kicked off fully and we are going from house to house. If we succeed in adding these customers to our network, people on estimated billing would pay less because more customers will be in the picture.
The second aspect of this initiative is the technical audit. All the power assets from transformer, cables, poles, and so on, used for our operations will be captured using our technology. In the long-run, immediately we identify a customer, we can tie the customer to a transformer; we tie the transformer to a feeder; and so on. The data is needed to manage the system effectively. It is a pity that we started late, but it is better late than never. In the next seven to 10 months, we are going to finish the metering project.
If we then marry the metering scheme to the CETAAM initiative, everything would begin to work seamlessly. Bypassing of our meters will become a thing of the past. Service will be pay-as-you-go. If you don’t pay, you don’t get power, and the idea of estimated billing will become a thing of the past.
By the time we finish CETAAM, we will be able to identify all the weak technical points on out network and now plan on how to do network expansion and maintenance. Of course, this will assist us to do good management and balancing.
Electricity tariffs are expected to rise by November this year, according to NERC. Can you justify IE’s position on this?
Our 10-year tariff schedule went through the regulator’s process. The truth is that whatever is realised from the tariff is used to fund the entire value chain of the power industry – generation, transmission, NERC, and others. When we say a tariff must be cost-reflective, we mean it must pay for everything along the value chain. If the tariff is cost-reflective, the only thing that distribution companies keep is less than 20 per cent of the entire money made.
NERC brought out guidelines, and one of them is that we meet our customers and agree on pricing terms. We had to do public consultation with the Manufacturers’ Association of Nigeria as well as other consumers. After that, we made our initial presentation to NERC. The regulator looked at it and referred us back to the customers again to tell them what the new tariff would be. After all, cost parameters have been considered.
We have made that input, and have submitted our tariff plan to NERC, waiting for its final approval. NERC had admitted that there was no way tariff review would be done without having a form of increase. We are expected to manage the increase without any backlash. The cost-reflective is, therefore, the tariff that will keep everybody in the value chain in business.
Vandalism in the power sector is now a major problem for Discos. What are you doing to check this?
We’ve continued to have cases of vandals descending on our network and carting away with valuables like cables. But we have made sure that areas affected by acts of vandalism are restored almost immediately. In our efforts to check this problem, we have been carrying along communities at various levels. We have visited all the security agencies and in fact, we have a working relationship with the Nigeria Security and Civil Defence Corps. Before, we could have as high as five cases of vandalism in a month; but now, maybe because of our proactive approach, the cases have been drastically reduced. Sometimes, in a month, we do not record any case.
Very soon, Nigerians will be paying more for electricity consumed. What is your message to your customers in this respect?
The management of Ikeja Electric is urging consumers within the zone to embrace a cost reflective tariff so that the company would serve them better.
Instead of NERC to fix the new tariff for electricity consumers, they now allow power distribution companies consult consumers in the different zones and come back for approval.
Discos are just like a daily collector, as the majority of the money paid to them go to generating companies and Transmission Company of Nigeria. Of every N100 collected from our consumers, only about N15 goes to our pocket. To be honest with you, because we do not have a cost reflective tariff, most of the Discos have not even paid the other stakeholders in the value chain.
I urge consumers within the zone to be objective in dealing with the issue. It will be difficult for the company to obtain loan from banks if they do not have cost reflective tariff.
We are also doing our best to really justify this. We are replacing bad transformers and upgrading our assets. Between January and June this year, we have replaced 96 defective transformers and have effected major repairs on feeders and other installations. The upgrade is a continuous process that will ultimately ensure stability and efficiency within the network. There is one aspect of asset that we consider as the most crucial. That is, our people. We have, since the takeover, continued to invest in our people through local and foreign training programmes designed for all categories of staff. We are confident to state that our people are among the leading professionals in the power sector and we have a seamless succession plan for the future through our Graduate Engineering Programme. We believe that all of our human capital investment will culminate in the best possible service for our customers.
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