• Thursday, May 23, 2024
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Re: Govt (CBN) N300b bonanza; the gas-to-power infrastructure conundrum, and other related matters (2)

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THE BUSINESS MODEL MUST CHANGE

To make progress on the power front, the current business model must be changed. We must pay the going rate for EACH and EVERY input in the complex value chain that is the electrical power industry. The government cannot realistically give what it does not own. The mass, energy and value balances must be achieved. That explains why I am ready today to pay more than double the going rate of N12.83/kWh if I can get reliable/ uninterrupted power. It will surprise many that if this is done, I will actually pocket a minimum of 30 percent savings on my current total expenses for electricity. The savings are even more for the so-called Mr Ordinary Poorman who nonetheless still operates a tiny generator at home. Or Mr Vulcanizer at the corner who spends an arm and a leg operating a 1horsepower petrol engine to run his air pump, when he can spend less than a third of that running an electric motor for the same purpose. I hereby appeal to the more numerate members of the consuming public who are capable of rigourous analysis “from first principles” (apologies to my late Prof Awojobi) to do their own findings and share same with us.

The value I attach to not having the noise and fumes, the highly inflammable fuel in my trunk, spent engine oil in my home, etc is immeasurable. As for the mechanic, we will continue to exchange only pleasantries whenever we meet.

I wonder how many recall the tongue-in-cheek article in the Guardian Newspaper a couple of years ago titled, “My Generator is smaller than yours.” All these illustrate how far down the slope we have slipped. 

ENERGY SAVING APPLIANCES

I will then continue to devote my efforts to energy saving practices and procedures, lighting, other usage and appliances. I was seriously embarrassed to see the Standard Organisation of Nigeria (SON) belatedly drag our President to present and publicly recommend energy-saving light bulbs on network TV. This came a full 4years after discerning consumers like myself started using them. 

AN ENLIGHTENED CONSUMER IS THE BEST CUSTOMER

Mine is the kind of enlightened consumer attitude that the power companies can depend on to make investment decisions. Insisting that supply reliability MUST improve before the regulator (NERC) allows viable tariff will only postpone the improvements we all desperately desire. I have commented earlier on the strange resistance of MAN to a proper upward review of tariff. They should know better. They have the numbers in their own books.

The time to act is now. If the current tariff is anywhere near fair, then why on earth does NERC go through the convoluted process of justifying the fixed charges which make absolutely no sense? It is one thing to be billed a (high) tariff for power supplied. But to be billed even 1kobo, for whatever reason, when power is NOT supplied is a real hard sell. The patently false populist stance of the government seeking on the other hand to intervene to PROTECT the consumer from the rampaging (?) power companies is actually premature and at this time counterproductive. We are supposed to be a nation in a hurry to make up for the years lost to the locusts, aren’t we?

NEPRI

For starters I had more than three years ago proposed to several knowledgeable individuals (who may perhaps understand and/or have a toehold in the corridors of power) to initiate the setup of the NIGERIAN ELECTRICAL POWER RESEARCH INSTITUTE as an independent organisation. The government will be perfectly free to ignore its findings and recommendations to its own peril. History will be the judge. I envisaged NEPRI modelled after EPRI of Palo Alto, California, completely free from the suffocating stranglehold of the government of the day. It is instructive that this writer did not get to know about EPRI while a student at Stanford. That eurika moment came many years later here in Nigeria when as a budding developer/manufacturer of inputs for the electrical power industry; I had to deal with the routine shenanigans of the unteachable management and staff of NEPA.

I am still waiting.

WHY NATIONAL GRID?

I am yet to run out of “crazy” ideas. In one forum I had proposed the idea of discontinuing the national power grid as a way of resolutely devolving power over power (no pun intended) to the states and/or the six geopolitical zones. Within three months I read of three different individual who had independently come to the same conclusion.  One was/is an engineering professor at the University of Lagos, the second a foreign technologist who had come into Nigeria for an event. The most amazing was the last, wait for it, a lawyer somewhere within the decision making structure of the ruling party PDP in Ogun State! I immediately linked up with him.

I envisage a situation where for example the people of Benue, Taraba, Nassarawa and Kogi States after despairing of waiting for ever to get the power they need. They then decide to pull themselves up by their own bootstraps, determine by themselves just how much power they need and proceed to build the power plant required. Each of these states is bigger than The Gambia many times over. I do not want to bother visualising what the Lagos State Government can and will do if we simply stop standing in its way. The single fact of approvals and contracts no longer being awarded at Abuja will probably provide an extra four percentage point boost to the growth rate of the GDP.

IMPLICATIONS OF FREE-MARKET

I cannot conclude without sharing some predictions of tough bad days ahead. There is a non-zero probability that some (a few) of the privatised power companies will yet go bankrupt, after the willingness of the government to keep bailing them out will have been stretched to its limit. Yes. That is the price of free enterprise, stupid! Much as they are evolving as we march along, the basic rules have been more or less clear. A poor effort at Due Diligence is nobody’s fault but the investors.

There was a time when every “money-miss-road” aspired to own a brewery and did. The countryside until recently has been littered with the carcasses. While I hold very strong views about the government not adequately protecting the pioneer CDMA telecom operators (more like throwing them under the bus) I can also observe that failures in that sector already abound, and we are living with it. Just like every bored retired army general aspires to join David Mark in the Senate, all those who made the new money of the last decade and half just could not resist making a play for one or more of the power companies, the new game in town. Lo and behold, they won! Now comes the hard part. Winning has serious consequences. For one, a good many of the new power moguls are now required to actually work for a change, managing men and materials, a tough undertaking even in the best of circumstances.

The burden of sourcing for funds for both rehabilitation and network expansion is something they were supposed to have planned for. Did they? This burden will consume a good number of them. The government must be prepared to take them over, stabilise and sell them once again. The public had better get used to this evolving scenario. 

INVITATION

Is there anyone out there, who is not otherwise engaged in looking for “chop money”, ready to step up to the plate? Nigeria definitely needs A FEW GOOD MEN, AND WOMEN! Not contractors… Let’s get NEPRI off the ground. The one thing that I can promise is that it will outlive all of us, which gives me a very nice feeling.

ENGR ODUCHE AZIH