Blueprint for Electricity Revival

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In his new book, “Conversations in Electric Utility Engineering,” recently launched at the Muson Centre in Lagos, Solomon Omorodion Uwaifo, a Nigerian author, gave a detailed description of the potentials and challenges of the Nigerian power sector. Sunday Ehigiator reports

Nigeria has been handed a well-informed insight into the endemic and debilitating problems of the power sector by Solomon Omorodion Uwaifo. The country has grappled with the challenges over the years, but now, solution seems to be in the offing. That is if the Nigerian government deigns to apply the principles contained in Uwaifo’s latest book, “Conversations in Electric Utility Engineering.”

Uwaifo, who is an NLNG joint winner of the Nigeria Prize for Literature, has over the years written about the power sector, offering the public his vast knowledge of the workings of the industry from his years of experience as a former top-ranked employee of the defunct Electricity Corporation of Nigeria (ECN). This time, he tells Nigeria what to do to change the industry and make it better.

This latest book of his was recently presented to the public at a formal launch. In it, he expresses his passion and commitment to ensuring that Nigeria’s power sector works, and serves as a fulcrum for the industrialisation of the country, as the power sector has done elsewhere.

The event, which was chaired by Chairman of the Nigerian Electricity Regulatory Commission (NERC), Professor James Momoh, also played host to other notable Nigerians and organisations. Among them were Vice Chancellor, Igbinedon University, Professor Eghosa Osaghae; Commissioner, EPM, Nigerian Electricity Regulatory Commission, Professor Frank Okafor; Chief Operating Officer, North South Power, Shiroro Hydro, Engr Daudu Abdul-Aziz; Tony Elunelu, represented by Christopher Ezeafulukwe, Executive Director, Transcorp Plc; lawyer, writer, Eishenhower Fellow, Ms Ayisha Osori; and retired Director of the National Troupe of Nigeria, Ms Josephine Igberaese.

Author’s Conversation

In his opening remarks, which he entitled, “Load Factor is The Dominant Achilles Heel”, Uwaifo said, “As a conversation, we need total relaxation to make the most of the book. It repeats the doleful stories we all heard, or told generously, in parts, yet it states in several other parts that we should be thankful to operators past and present that Nigeria still has an electric power supply industry we can talk about today.

“Yesterday, we probably would not have agreed that all the three links in the chain of Electric Power Supply – generation, transmission, distribution – are inadequate. Today, we totally agree that they are. We have almost regressed the industry to pre – 1951 levels.

“Nigeria builds power stations, erects transmission lines and main substations, as well as distributes electric power today as she has done since 1951. But we know that practically every such service has become tardy and unreliable. Yet, after 67 years, the industry is alive, if barely, and the most conservative among us would give it a rating of 20 per cent perhaps.

“Operators of the industry must be doing something wrong for such a low rating. However, they must also be doing several things right as well, to survive the political upheavals of the past 67 years.

“Conversation in Electricity Utility Engineering narrates the wrongs that have consigned the industry to its terrible state. The flaws are not about doing nothing, but about the dearth of commercial engineering applications to ensure a viable and vibrant electric power supply industry.

“Call it ECN, NEPA or whatever you will, the monolith denied the industry commercial engineering the economic nerve centre of the industry. Rather a department initially instituted in April 1951, only operated in its first few years with the required commercial focus.”

He continued, “Leasing electrical appliances helped to diversify electrical commercial focus. Leasing electrical appliances helped to diversify electrical energy usage then, however, the increase in electric loads was marginal. That level of focus on commercial engineering was as much as was needed in those early years perhaps, but in subsequent years when the ECN needed more, the focus disappeared entirely.

“Leadership which lacked an understanding of engineering economics and ratemaking were continually posted to head department. The purpose of a commercial department, is to find ways to improve load factors and to sustain them at optimal levels. Typically that requires creative thinking and the best wags in collaborative marketing, focussed on incentivizing other industries to demand more electric power. In large measure, the U.S.A owes her giant industrial development to that kind of collaboration.

“In Nigeria’s current situation, marketing symbiosis in the industry requires that the Discos have complete control of the design of electricity rates and rate structures. The NERC should control rate of return on investment as well as accounting, depreciation and human resource practices in Discos. Direct control of rates by NERC constrains the Discos, at a time when they need the freedom to embrace creative management of electric power and its market.

“Unfortunately, the monolith only ever hired engineering economist specialised in ratemaking on occasions when it redesigned rates. When the process was completed, the specialists were discarded leaving no one to monitor the revenue contribution of each of the class of rates designed; an essential functions of commercial engineering departments.

“As was with the monolith then, so it is with the Disco now. Industries are fewer at this time and the downturn in revenues is most severe. To alter that, Discos must employ Engineering Economists and ratemaking specialists permanently. They are the commercial brains of the industry. Without them, Discos are as blind as the monolith was, and can only lead the industry into all manner of difficulties.

“Yes, generation, transmission, and distribution need improvements. There will always be non-technical issues to resolve. Technically, however, low load factor is the dominant Achilles heel and only Engineering Economists and ratemaking specialists can overcome it by collaborative marketing that creates more electric loads, not less or fractionalised loads, as the new approved customer doctrine is doing. We must work for higher load factors and sustain them. That is the way to lower rates and increase revenues.

“The NUC ought to incentivise Nigerian universities urgently to teach these subjects because they are essential requirements in the management of every utility. Gas, water, communication and other public utilities will be better with these experts.

“If NERC continues to control tariffs, and Discos do not employ these specialists, the industry will remain a sick colossus, always on the brink of collapse over rates issues, no matter what else it does right. And the country will continue to sit on the backseats of human and economic development, while her gifted citizens roam the world in search of fulfilment.”

Failure of Successive Governments

Chairman and Chief Executive Officer, NERC, Momoh in his remarks at the occasion blamed the poor development of the country and the economic downtown on failure by successive governments to grow and develop the power sector to allow for the industrialisation of the country. Momoh, who was the chairman at the event, traced the history of electric utility by Edison, which he said had grown in quantum over the years to engineer production and industrialisation across the world.

But in the case of Nigeria, he said the country didn’t take full advantage of the entire utility spectrum of electricity. Pointing to the lack of creativity, innovation, and investors, which tends to doom the sector to dependence on the government, Momoh said, “We didn’t grow our electricity.” But he believes all hope is not lost. The NERC chairman, who said he felt honoured and privileged to be invited to chair the event, noted that such a hope could only be rekindled if Nigerians followed through some of the prescriptions offered by the author in the book.

He added, “Nigeria can’t grow if we don’t increase the awareness of science in this country. Uwaifo has given us hope and if we want to get there as a nation we need to embrace technology and science. We will not get there if we don’t.

“We are here to celebrate the pioneer and Edison of our world. Nigeria can’t grow if we don’t increase the awareness of science in this country. Uwaifo has given us hope and if we want to get there as a nation we need to embrace technology and science. We will not get there if we don’t. We are asking for new technology and we at NERC can only make an impact if we know and embrace the big knowledge.”

The book was officially launched by the chairman of the occasion in company of representatives from The Nigerian Electricity Industry (NESI), Distribution Companies (DISCOS), Generation Companies (GENCOS), Transmission Company of Nigeria (TCN) and Nigerian Bulk Electricity Traders (NBET).