The challenge of not getting the appropriate tariff by the electricity distribution companies (Discos) has compelled them to devise means of keeping their business afloat through special window provided by such government policies as eligible customers; willing buyer and willing seller.
In order to provide steady electricity to its customers, Ikeja Electric has worked assiduously to get some organised groups to buy into its initiative called ‘Premium Power initiative’.
Under this initiative, there was a power-purchase agreement which entailed a commitment to specific service level standards by Ikeja Electric, while the customer agrees to pay a tariff that is above the current MYTO tariff (what is myto? Please, spell out)
One of such organised groups is Magodo Resident Association. The community recently signed an agreement with Ikeja Electric which has invested in electricity infrastructure in the estate. The residents are now enjoying reliable and quality electricity supply for over 20 hours daily.
However, the residents are paying N47 per kilowatt per hour as tariff as against the N24 per kilowatts hour being paid by majority of electricity consumers.Following the execution of this agreement, residents of Magodo who are elated by the development now boast of having stable power supply.
The agreement which came into effect in August this year has given peace of mind to residents of Magodo as far as electricity supply is concerned. They currently enjoy 24 hours supply, a resident who said he was not authorised to talk for the community said.
According to Kunle Eludire, former president of the association, he no longer bothers about buying diesel or fuel as he gets electricity supply for 20 hours a day. “We have been under darkness before, but now we have seen light”.
He said there is no more noise, air pollutions. While the risks associated with buying fuel is also no more. We sleep well now in the estate. Stating further, he said, even if the company wants to carry out any repairs the residents are informed hours before doing that. “They will tell us how long the repairs will take and most time they don’t stay as long as they had projected before supply is returned”.
He argued that if Ikeja Electric could continue with this initiative, it would not have problems, stating further that all that is required is commitment on the side of the company.
He advised that the company should improve on its infrastructure so that it could be more efficient. “I will also recommend that other organised estates within the Ikeja Electric franchise area should do the same thing.
Jade Niboro, the current chairman of the association said there has been a lot difference since the commencement of the agreement between Ikeja Electric and the residents, which now enjoy over 20 hours of power supply.
He said following the agreement, the company decided to install brand new infrastructure or upgraded some of the existing ones in order to make available unterrupted power supply.
Those infrastructure includes installing new transformers, cables, electric poles and other accessories to avoid local faults.
BusinessDay investigations revealed that productivity of the small scale business concerns in the area has improved as their cost of production has gone down. An official of one of the schools in the area said because of this development her school management has increased their salaries; while one of the schools is alleged to have even reduced the school fees of it pupils. This is because they no longer buy diesel or fuel to power their generators.
Business operators can now save more money to do some other things or expand their businesses with the money which they would otherwise have spent on diesel or petrol.
We are happy now because we can plan our activities and our business planes can be executed as planned, said a man who operates a business centre.
The business atmosphere in the area is no longer distorted because of long time of power outages. Even house wives no longer entertain any fear of their ingredients getting spoilt because of lack of power
Anthony Youdeowei, CEO of Ikeja Electric said the plan will show to Lagosians and Nigerians at large that the power sector can work if we have the right mix of customers who are willing to pay for the power and a distribution company who has the capacity to deliver.
“We know there is a lot of cynicism in the sector; however we believe when we have a set of customers who are willing to trust by paying a market price then we can make things work,” Youdeowei said.
Ikeja Government Residential Area (GRA) is now taking a cue from Magodo as it has just signed a bilateral power agreement with Ikeja Electric to invest in electricity infrastructure in the estate, a development which is expected to guarantee residents over 20 hours daily supply of electricity.
Folake Soetan, the chief operating officer of Ikeja Electric, expressed confidence in the success of the trend-setting agreement which she noted was in line with the Federal Government’s “willing seller, willing buyer” policy.
“We are confident that this agreement will serve as a model for other power agreements in the power sector because, while it is in line with the Federal Government policy, it also reflects our unwavering commitment to our customers. This has also been made possible by the Nigerian Electricity Regulatory Commission’s directive to Discos to provide an enabling environment with exceptional service delivery,” she said.
Before December, Ikorodu, Abule Egba and Akowonjo will also be included in this arrangement, Soetan told BusinessDay.
Muiz Banire, the chairman of Ikeja GRA said the journey of negotiations of the contract started almost four years ago with ups and downs, but that the residents remained committed and believed it was achievable.
“This partnership has come to stay and we the residents will play our part to make it work in order to reap the best from this arrangement,” Banire told BusinessDay.
Olusola Bello
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