By Uche Matthew and Jeremiah Aderinto
S.P.A. Ajibade & Co.
- In Nigeria today, the power Distribution Companies (DisCos) are faced with several challenges, one of which is electricity theft. Electricity theft is simply the practice of bypassing, stealing, or utilizing electricity without paying for it. The most common form of electricity theft in Nigeria is meter bypass and illegal hook connections by consumers who try to cheat the system by not paying for power used in their household and businesses. This remains one of the major causes of massive revenue losses which increases the debt profile in the Nigerian Electricity Supply Industry (NESI) negatively impacting the nation’s economy.1
- Effect of Electricity Theft on the Nigerian Electricity Supply Industry
- Electricity theft negatively affects the entire value chain and remains a scourge to the power sector. While its impact is borne greatly by the DisCos, the overall adverse effect of electricity theft affects the value chain in totality. In a report by the Director of the power sector advocacy group in Nigeria, eleven (11) electricity distribution companies lost approximately N97,000,000,000.00 (Ninety-seven Billion Naira) to electricity theft in the first three months of 2021.2 Furthermore, in a report by the Association of Nigerian Electricity Distributors (ANED) over N30, 000,000,000.00 (Thirty Billion Naira) of their monthly revenue is lost to cases of electricity theft, meter bypass, vandalism and unpaid electricity bills by consumers. According to the NERC, over 25 percent of the total energy wheeled by the Transmission Company of Nigeria (TCN) to electricity Distribution Companies (Discos) is lost to theft and technical inefficiency.3
Electricity theft also contributes largely to the power supply crisis in Nigeria which has been a longstanding complication in the Nigerian Electricity Supply Industry (NESI). The electricity that is being generated in the country falls short of the needed capacity to power the whole country.4 Despite this shortfall, it is disturbing that the meagre electricity generated is also being stolen by some unscrupulous consumers. While poverty is a major cause of electricity theft, factors such as greed and moral laxity also contribute to this menace.
- Legal and Regulatory Framework for Curbing Electricity Theft in Nigeria
- The Electric Power Sector Reform Act 20055 (EPSRA) is the primary legislation that governs the NESI and the NESI value chain (including electricity generation, transmission, distribution, supply, and trading). The EPSRA also established the Nigerian Electricity Regulation Commission (NERC) which is responsible for licensing and regulating persons engaged in the generation, transmission, system operation, distribution, and trading of electricity. The NERC has over the years issued several regulations and guidelines regulating the NESI.
In 2013, the NERC formulated the Electricity theft and other related offences regulations in order to deter electricity theft and the destruction of electricity supply infrastructure. Section 1 (1) of the regulation provides as follows:
“Any person who willfully and unlawfully –
- taps, makes or causes to be made any connection with overhead, underground or under water lines or cables, or service wires, or service facilities of a licensee; or
- tampers with a meter, installs or uses a tampered meter, current reversing transformer, shorting or shunting wire, loop connection, receives electricity supply by by-passing a meter, or uses any other device or method which interferes with accurate or proper registration, calibration or metering of electric current or otherwise results in diversion in a manner whereby electricity is stolen or wasted; or
- damages or destroys an electric meter, apparatus, equipment, wire or conduit or causes or allows any of them to be so damaged or destroyed as to interfere with the proper or accurate metering of electricity, so as to abstract or consume electricity or knowingly use or receive the direct benefit of electric service through any of the acts mentioned in paragraphs (a), (b) and (c) or uses electricity for the purpose other than for which the usage of electricity was authorized, so as to abstract or consume or use electricity shall be guilty of an offence under Sections 383 and 400 of the Criminal Code, Sections 286 (2) of the Penal Code and Section 1 of this Regulation, and shall be punishable with terms of imprisonment as applicable, provided under Sections 390 of the Criminal Code, Section 287 of the Penal Code or Section 94 of the EPSR Act.”
- Further to the above, Section 94 (3) of the Electric Power Sector Reform Act (EPSRA)6 also contains provisions prohibiting electricity theft in whatever manner. It provides that:
“Notwithstanding anything contained in any other law, any person who willfully destroys, injures or removes equipment or apparatus of a licensee commits an offence and is liable on conviction to imprisonment for a period of not less than five (5) years and not more than seven (7) years.”
Moreso, the Miscellaneous Offences Act7 contains provisions that addresses tampering with electricity equipment. It prohibits tampering with electric plants and works by providing that:
“Any person who unlawfully disconnects, removes, damages, tampers, meddles with or in any way whatsoever interferes with any plant, works, cables, wire or assembly of wires designed or used for transforming or converting electricity shall be guilty of an offense and liable on conviction to be sentenced to imprisonment for life.”8
The Miscellaneous Offences Act also prohibits tampering with electric fittings by providing that:
“Any person who unlawfully disconnects, removes, damages, tampers, meddles with or in any way whatsoever interferes with any electric fittings, meters or other appliances used for generating, transforming, converting, conveyancing, supplying or selling electricity shall be guilty of an offence and liable on conviction to imprisonment for a term of not exceeding twenty-one years.”9
The Lagos State Electric Power Sector Reforms Law10 also makes provisions for curbing electricity theft within the state. In order to curtail the increasing rate of electricity theft and vandalism in the state, the Law criminalises meter tampering and destruction of electricity infrastructure.11 The Law establishes a Power Task Force which is vested with the power to arrest offenders of the Law. The Task Force is also empowered to enter upon, inspect and search premises in which an authorised officer of the Power Task Force has reason to believe that electricity is being or likely to be used unlawfully.12 In order to validate the search by officers of the Task Force, the Law stipulates that the provisions of Part II of the Administration of Criminal Justice (Repeal and Re-enactment) Law13 shall apply with respect to searches and seizures under the law. Furthermore, for speedy dispensation of cases of this nature, the Law vests jurisdiction to try these offences in Special Courts.
As a manifestation of the state government’s resolve to stamp out the illegal activities of unscrupulous consumers and to discourage electricity theft within the state, the Lagos State government recently prosecuted a person for by-passing a meter. In a statement by the head of the legal and regulatory compliance department of the Ikeja Electric company, one of the major challenges affecting the efficient services delivery of DisCos is the high incidence of energy theft. He also stated that the negative impacts of energy theft on the value chain are so grave that it robs the value chain of the critical revenue required to effectively drive the power sector.14
- Effective Ways to Curb Electricity Theft in Nigeria
- Implementation and Enforcement of Electricity Theft Legislations
- There is a need for the implementation and enforcement of the electricity theft related legislations by regulatory agencies in order to prevent further loss. While the establishment of the Power Task Force under the Lagos State Electric Power Sector Reform Law is commendable, there is a need to emphasise the effective discharge of its responsibility in deterring consumers from stealing electricity.
Any further delays in the effective implementation and enforcement of electricity theft related legislations will encourage continuous incessant behaviour by the theft agents which will in effect hamper DisCos businesses and their ability to meet performance targets as contained in Performance Agreements. Ultimately, the consequential effect on DisCos revenues will widen the already increasing sector liquidity gap.
Furthermore, there is a need for collaborative engagement of the DisCos with relevant regulatory and enforcement agencies to tackle electricity theft in their respective distribution zones.
- Consumer Education and Enlightenment
- There is a need to educate electricity consumers on the fundamentals of the electricity sector and the importance of fighting the crime of electricity theft. The notion conceived in the minds of average Nigerian consumers is that power is an entitlement and that DisCos are rivals, denying them of what is theirs. This notion ought to be erased and can only be done through intensive enlightenment programmes. This entitlement mentality is one of the major drivers of electricity theft in many parts of the country.
- Designation of Special Courts to Handle Electricity Related Offences
- Judicial intervention through speedy and efficient justice dispensation of the existing legislation will help to reduce the unrelenting trend of electricity theft. In this regard, there is a need for the designation of special courts to handle electricity related offences.
- Conclusively, the importance of the eradication of electricity theft cannot be over-emphasised especially given its adverse effect on the DisCos. It is therefore the collective responsibility of all stakeholders to undertake an aggressive campaign on the hazards and impact of electricity theft in the country. Curbing electricity theft will go a long way towards efficient use of power, energy audit, improved financial status, and viability of the power sector value chain that would in turn contribute to the economic development of the nation. Failure of collective cooperation among stakeholders to address this menace would translate to a decrease in power sector sustainability, lack of improved and expanded distribution network, delayed replacement, or repairs of faulty transformers, as well as impact the provision of other essential services. Culled From Mondaq