Electricity: NERC Expands Accountability Charter with Consumer Activism
The Nigerian Electricity Regulatory Commission last week instigated the setting up of an independent advocacy network to deepen the often delicate interaction between operators, the regulator and consumers in the delivery of electricity in Nigeria. Chinem
By and large, consumer advocacy has been described as actions taken by individuals or group of people to promote and protect the interests of the public who buy goods and services and equally expect some measure of satisfaction from such purchases.
As it has metamorphosed like every other human endeavour, advocates of consumers’ rights have assumed what is today referred to as an adversarial roles in exposing unfair business practices or unsafe products that threaten the welfare of the general public and which operators and producers are often found guilty of pulling off.
With carefully thought-out strategies that include profile-raising, embargoes, formal communications, campaigns, negotiations and lawsuits, advocates of consumers’ rights have been able to raise awareness of issues affecting consumers and counteract the effects of such developments on consumers.
Likewise, financial and political powers often flaunted by organisations in their mistreatment of consumers have regularly fallen to the brilliant strategies and subsequent wounds exerted on their operations by consumer advocate groups. The ire of consumers’ rights advocates is said to give sleepless nights to business owners that attempt to engage in practices that might draw their attention. Prolonged consumers’ indignity It is not in doubt that periods of sustained monopoly of operations in Nigeria’s electricity industry by state-owned electricity company, the Power Holding Company of Nigeria (PHCN) has suppressed the advent of vocal consumer advocacies.
PHCN’s firm monopolistic grip on the industry ensured that in addition to its well-known incompetence in quality service delivery to consumers, expected complaints from consumers were immediately shutdown with the absence of appropriate channels and mechanisms for engaging consumers and addressing their complaints.
The defunct power company appeared to have no functional consumers’ complaint units in all of its electricity distribution and cash collection points and this singular practice ensured that any advocacy network desirous of taking up consumers’ dilemmas was set up to fail with PHCN’s unreliable consumers’ complaints system.
In as much as a federal agency, the Consumer Protection Council (CPC) was established by Act No. 66 of 1992, to amongst other tasks, provide speedy redress to consumers’ complaints through negotiation, mediation and conciliation, electricity consumers in Nigeria still did not have it good with PHCN and even now, that practice has perhaps spilled into the current era of privatisation, where new operators of electricity firms are constantly found guilty of disrespect for consumers’ rights.
Inheriting PHCN assets and its former workers, the new owners of electricity distribution companies in the country’s power sector also inherited a legacy of disregard for democratic processes in managing expectation of customers in a liberalised power sector.
That perhaps explains more or less, the reasons recently advanced by electricity distribution companies like Abuja Electricity Distribution Company (AEDC) for allegedly violating its operational rights vis-à-vis consumers’ rights, for which NERC also retaliated by serving it a notice of disciplinary actions.
In modern day Nigeria where electricity privatisation is gradually gaining ground from reforms enunciated in the Electric Power Reform Act 2005 (EPSRA), the rights of consumers is gradually expanding to include safety of service delivery, legitimacy of advertising claims, satisfactory resolution of grievances and complaints raised in the process of service delivery, and now, a say in government decisions for the sector which NERC is pushing forward more with its recent setting of the Nigerian Electricity Consumer Advocacy Network (NECAN). Setting a new conversation As expected, in the early days of Nigeria’s electricity privatisation, the distribution companies could from the poor consumer rights legacy left by defunct PHCN, afford to ignore the wishes of and demand from consumers for standard service delivery because there was no visible voice to press them hard on these requests.
Instances of unsolicited and undemocratic tariff reviews, poor metering of consumers, disproportionate charges for electricity consumption via estimated billing method, as well as disregard for sundry consumer related complaints dominated discussions in the downstream sector of the electricity industry. Mostly visible in all of these discussions were the operators and NERC with no visible consumers’ representation.
As it were, operators who often had command of situation in the industry and without consumers’ representation, had unassailable opportunities to influence the outcome of regulatory decisions in their favour and to the detriment of consumers.
Because there were no consumer advocates to point out and challenge extant operational abuses at such discussions and NERC could only act on what it has, these operators continued in underhand business practices in manners that pushed individual consumers like Samuel Aremu to petition and have NERC intervene in an ongoing case of alleged illegal trading in electricity at a Lagos high-rise estate, the 1004.
The case, which has both the management of 1004 and Eko Electricity Distribution Company (EKDC) as offenders is being determined by a NERC’s administrative panel.
Notwithstanding, cases of outright neglect of consumers’ rights to fair hearing and actions continued in the industry, thus suggesting that the regulatory agency was biased to operators’ interests against that of consumers.
The chairman of NERC, Dr. Sam Amadi however blamed the deficit of democratic structures in the industry for the seeming invisibility of consumers in NERC’s regulatory interactions with stakeholders.
“We have institutionalised anticorruption practices and procedures to inoculate NERC against regulatory capture. Yet, in spite of our noble intent and progressive actions, outcomes are still not fair to consumers.
The reason is that the last, and perhaps, the most important component of architecture of democracy, symmetrical power relations, is still absent. Until consumers are organised and therefore able to contend against operators, the democracy bargain in the Nigerian electricity market will remain deficient,” Amadi said.
He further explained that the absence of knowledgeable, credible and broad-based advocacy for electricity consumers have been identified as observable gaps in the current electricity market in Nigeria, adding that unlike the powerful voices of service providers, consumers’ voices are still played down.
“The fact is that consumer voice is underrepresented in the emergent electricity market. The reasons for this deficit of consumer voice and power are that the individual consumers and consumer groups are too dispersed and too fragmented and their levels of engagement too superficial, too adversarial and too episodic to have the desired impact on outcomes in the sector,” he added. Advocacy network for consumers Comparing the state of disempowerment of consumers with the powerful position of the service providers in the electricity market, NERC posited that the democratic deficit in the industry has seen ordinary processes of governance in the industry create and reinforce the disempowerment of critical stakeholder like consumers.
It noted that electricity service providers in the country are few, highly funded and highly organised in such manner that they have the incentives to gain better understanding of the technicalities of the industry, afford the best of intellectual support to shore up their knowledge base and negotiation power, at the same time gaining better acquaintance with the issues and the processes of the sector to have greater access to the decision-making process.
“The sum of all these is that when compared