Sanda: Eko Disco Exploring All Options to Deliver Quality Power Supply to Consumers

Managing Director/Chief Executive Officer of Eko Electricity Distribution Company, Dr Tinuade Sanda, marked her one year in charge of one of Nigeria’s largest multi-billion-naira power distribution companies with many milestone achievements recorded within the year. In this interview with THISDAY, she reeled out her plans for the company for the next five years, which includes the plan to explore both on-grid and off-grid options to further deliver quality power service to all consumers of Eko Disco and ensure the close out of the company’s metering gap. Sanda also expresses optimism that president-elect will efficiently coordinate all efforts necessary to steady the supply of power in Nigeria, given his enviable credentials particularly, his remarkable interest in the power sector. Excerpts:

What are your expectations for the power sector from the president-elect?

First, it is reassuring to know that Power is a key component of the President elect’s Renewed Hope Agenda. The incoming administration recognises the current challenges and constraints hindering generation, transmission, and distribution of power in Nigeria. I therefore expect the incoming administration to bring to life their commitment to seeing to improved power supply, and improve on what the outgoing administration had done because as we know, power is the bedrock of any economy. We recognise that power is a significant component of production or operating expense in any business, it is therefore important that we continue to improve the Sector  by addressing the current gas issues, addressing the issues that have been affecting the sector in terms of liquidity, infrastructural upgrade and rehabilitation, increased capital injection, friendly and attractive regulatory framework to promote cost reflective tariff,  investments in the different chains of the Sector including metering and infrastructure maintenance. there will be improved standard of living and better GDP. I am optimistic that the president-elect will efficiently coordinate all efforts necessary to steady the supply of power in Nigeria, given his enviable credentials particularly, his remarkable interest in the power sector.

President Muhammadu Buhari has signed into law the power sector decentralisation bill. What is your take and expectation from this new legislation?

In my opinion, I feel the signing into law of the bill is in the right direction for the power sector. However, I know it might have huge impacts on the current structure that has provided some degree and comfort to investors. But I think it would also help to bring effectiveness, efficiency, and some level of possibly healthy competition to the power sector. However, I want to urge the state governments to work and collaborate with the investors that have invested in the power sector because, we don’t want it to be construed that the terms and conditions of the privatisation are not being adhered to, to avoid a situation where foreign investors would be concerned about arbitrary government policy changes. But I personally feel that if implemented properly, given the capital intensive nature of the Sector, the constitutional amendment will attract necessary investment required within the sector, including the replacement, rehabilitation and upgrade of dilapidated infrastructure. it is also expected to bring about more strategic partnerships, business alliances, more equity investments and improved liquidity to the sector.  So for us in Eko Disco, we look forward to collaborating with the Lagos and Ogun State governments and seeing how we can improve the experience of our consumers in our network areas in that regard.

How far would you say the power sector has fared nine years after privatisation?

When privatisation was going to start in 2013, it was with high hopes that we would be able to do away with the era of erratic power supply and that there would be a lot of significant improvement in the power sector. However, in the last nine years, different government policies had affected the sector both positively and negatively. But I would say that from where we are coming from in 2013, there has been significant improvement in the power sector. Government has invested quite a lot in the Transmission Company of Nigeria, ensuring that the bottlenecks and challenges that we have been having from being able to wheel power to the Discos are being addressed to a large extent, though, still a work in progress. With the Siemens contract that government entered into, we know that a number of power transformers have been imported and they are being connected in different parts of the country.

However, for us in Eko, we’ve invested quite a lot within our network area. In recent time and in the last one year, I would say that we’ve invested about N14 billion to address some capital projects, to rehabilitate the network, to ensure that we meter our customers, to ensure that we improve our consumers’ experience. So our own focus is to distribute more power notwithstanding what is happening with the grid. We also looked into collaborative relationships where we could get more power from IPPs. There are a couple of IPPs we’ve signed contracts and are working with within Eko network area. There are also some other Gencos that we have gone ahead to have  bilateral relationships with, just because we want to serve our consumers better and be able to provide power to them.

We’ve seen that just relying on the grid is not sufficient, and, the regime of the power regulators that we have now have been very collaborative. They are forward-thinking and they look for innovative ideas that would help improve the sector’s liquidity, and address the challenges the sector is facing. One of the major challenges we are facing is metering. You keep hearing consumers shouting estimated bill, it’s real and it’s a concern even for us as Discos. I also want to sell my energy and be able to bill accurately what consumers have utilised. But what you have today is that we are not able to attract necessary funding that is required because of the issues the sector is plagued with. Lending from the banking sector in Nigeria is short to medium term, none of them is ready for the long term funding which is what the sector needs.

So what NERC has done is to introduce a meter acquisition fund, where a tariff component of 75 kobo for every kilowatt hour is dedicated to the Fund on a recurring basis. The Fund is dedicated to DisCos to provide credit towards meter acquisition. Also, this year at Eko, one of our plans is to ensure that we are able to meter about 30 per cent of the unmetered consumers within our network area. So, I’ve prepared the metering plan for the next three years which focuses on aggressively closing the metering gap year on year. Further, as we know that Meters have their useful life term, and some within the network have outlived this term which means that they need to be replaced. What I intend to do is to immediately focus on replacing these obsolete meters at the end of the three-year term after we must have considerably closed the current gap. But as the sector keeps evolving, Eko on its own will keep addressing infrastructure challenges because if we don’t address the network, when power generation improves, we will not be able to evacuate and distribute.

So we on our own are also planning and have our own expansion programme  . We want to expand towards Ibeju-Lekki axis. Today, Ibeju keeps evolving and we find the population increasing tremendously, so we are also planning to keep up with the growth and power needs of the area and other areas experiencing increasing population and development growth within the State.  We also continue to closely monitor the Lagos and Ogun State government’s plans  on growing the businesses and undertaking developments within their respective States.So we are also planning ahead and alongside these States to ensure that we continue to keep up with the power needs of the citizens within our franchise areas in the Southern parts of Lagos and Agbara in Ogun State. .

What has been your experience managing one of the largest Discos in Nigeria in the past one year as CEO?

Since 2013, I’ve been part of the executive management in Eko Disco and started off as the Chief Accounts Officer overseeing the finances of the Company. . So I quite understood the company very well and the challenges we’re facing as a sector. I have overtime come to understand the quick wins and the low hanging fruits that we should quickly take onboard, what needs to be done, risks and mitigating measures, etc. This has prepared me for the position even way ahead of my appointment as the MD/CEO.

At least in the last year, we have successfully driven down the Company’s ATC &C losses, and are currently working towards breaking even. The first thing I did upon my appointment was to map out strategies with my team, to help address our infrastructure issues, metering challenges, inefficient collections and most of all, improve customer and workforce experience.

 I mentioned earlier that one of the challenges we had was the old dilapidated infrastructure. We have prevalent faults recorded day in day out. When it rains, we have to take more precaution including putting out some of our infrastructure, for safety reasons not just the safety of our workforce, but also, of our customers within our network area. This in particular affects our services to our esteemed customers and negatively impacts on our revenue. So I understand that one of the quick wins for us is to look at how we can improve our services to make our customers happy, increase our revenue, look at how to drive down our operational expenditure and ensure that we also meet our obligations to the market because when you don’t meet up your obligations to the market, you create another liquidity problem within the sector. If I’m taking energy and I can’t pay for the energy, Gencos too cannot pay the gas companies, then we’re back to square one, because most of the problems we have in the sector is because of the illiquidity. So one of the things we did was to look at our customer base, we looked at the way we distributed energy, then re-strategised and started distributing energy more efficiently. We looked at the metering issues, drew up a plan to address the metering problems including the introduction of a 72-hour Metering Programme to improve the metering process, with the launch of mobile MAP at each District.

We got customers to come to apply for meter at the district offices and within 72 hours, we ensured the commencement of the installation process. So what that helped to do was to encourage the consumers to personally come forward to apply for meters and spread the word that if you apply and get your KYC done, you get metered within 72 hours. We also used that opportunity to enlighten our consumers that you don’t need to give bribe to anyone to get metered. If any of our employees was asking anyone for gratification, we have whistle blowing lines, email addresses that could be used to report such and through that, we were able to take disciplinary actions against erring staff. What we also did was to do a lot of customer engagements and enlightenment. We started giving notices out on when we have preventive maintenance or a planned routine work that needs to be done. We reduced the way we were also granting outages for connections and now have specific dates and hours for that. We changed it to Wednesdays and Fridays and, our consumers know that if power is not available within 10am to 12 noon or 10am to 1pm, this is the reason, unlike before where we were just arbitrarily granting outages. We also started streamlining and optimizing our processes, we introduced a lot of automation to our work processes. And we have also introduced 24 hours shift for some parts of the network areas for now, with the hope to gradually attain full implementation across our network. What that means is that, if for example there is any fault within the Island District area today, there is a dedicated team that is available to immediately clear or rectify the fault after all the HSE checks .

In the course of the year, we also bought transformers; over150 transformers in order to address the issue of transformer overloads that we had in our network areas this in particular reduced outages in some areas and improved reliability

Other customer experience measures taken included the creation of additional contact centres that our consumers can reach different touch points closer to them and make their complaints, establishment of a robust contact centre platform that we now use for consumers to reach us at any time of the day, whether public holidays or weekends, they can log in their complaints, track their complaints to monitor the progress.

 In the course of the year, we have developed measures to improve our collection efficiency which have resulted in record-breaking achievements.

I also recognise the important place of our workforce, the workplace satisfaction and career progression as I believe the employees are the strong pillars of our organisation and the successes we have achieved thus far. In that light, my team and I developed sustainable ways to improve the morale of staff by increasing staff salaries by 25 per cent and promoting over 1000 employees in October 2022.

So for this year, we are going on another trajectory. e We have identified quick wins and broken down our goals into immediate, medium and long-term goals. The team is focused, we are energised, and we are willing to drive these goals and attain more ground-breaking achievements.

What is your current metering position in relation to the number of customers metered as against your customer base?

Today, I can proudly tell you that we’ve metered over 60 per cent of our customer base. The remaining 40 per cent plus the meter replacement have been addressed in our next three years’ metering plan as I stated earlier. Although, we want to under-promise with the hope to over deliver, but our target is to meter everybody within the next three years. So, today, our customer base is over 680,000 and with our metering plan, the gap should be fully closed in three years except for new connections coming into the network whom we have planned to simultaneously meter as they get connected.

I know you’re not NERC, but what can you tell us that is delaying the roll out of four million meters expected in the next phase of the NMMP?

The roll out is not done by NERC – it’s the regulator for the sector. So the metering roll-out was a federal government initiative and of course, for every federal government initiative they must also have the funding to drive it. We hope that it will be one of the initiatives the incoming administration might look into to further make transition seamless. We know conversations are ongoing with the local manufacturers that intend to participate in the NMMP Phase 1 program, and we are hopeful that it would come to reality soon. This notwithstanding, like I said, other ways are being considered to ensure metering, including the Meter Acquisition Fund that I mentioned earlier which should commence soon. Also, if you have investors or financiers that are willing to finance meter acquisition, they are also welcome because DisCos  are  allowed the right to explore vendor financing for metering. For us, we continue to explore different options to drive our metering programme.

What do you intend to achieve in the next three to five years in Eko Disco?

I’ve broken that down into different milestone achievements. One of the first things I will love to see are all capital intensive in nature. For instance, today, when there are faults at the feeder level, I can know from my office, my team will know. When it’s at the distribution transformer (DT) level today, I don’t know, I will rely on my consumers to inform me, or when my team goes out on patrol, they will know that a particular DT is not picking sufficient load or there are issues with it. However, with the existence of the Internet of Things (IoT), I want to be able to deploy smart distribution transformers which will enable me detect the availability of a DT in real time, and I wouldn’t need anybody to inform me or call me that there is a problem. Also, I intend to automate a lot of processes internally. Today, we have invested heavily on automation, but I intend to build on that for more efficiency, easy tracking and improved preventive maintenance. That way, I know when I need to replace a particular asset. I don’t wait until that asset breaks down.

For instance, if I need to top up my transformers with transformer engine oil today, there must be something that will alert me on that. So, today, what we do is, we typically go there manually, we have a routine timetable calendar, and I may get there and find out that the transformer doesn’t need engine oil replacement. But if I have a system that prompts me and tells me that this is when this asset was installed, this is when last it was serviced, this is the next thing we need to do, etc. it improves my efficiency and services as a Disco.

At the same time also, I want my consumers to be able to say, at least we get 20 hours power supply every day, not few consumers but almost all my consumers that will be able say that. So I look forward to when that will happen in the country. I want to be the first Disco that will achieve that. So this is us, Eko not just working with the grid, but I’m also looking at other bilateral relationships. I’m looking at other IPPs, I’m looking at other renewables, grid power solution providers that I can partner with. We are currently in the discussion phase, there is one of the IPPs that have gotten their licence approved by NERC, they have started the building of the plant, it’s going to be stationed in Victoria Island, so that’s for Victoria Island. VI is not the only area I serve today. I serve from Agbara to Ibeju. So if in another three to five years, I can get 90 per cent of my consumers saying we have 20 hours power supply, it will be a great achievement. So, I look forward to that. I have different projects, schemes of work that need to be executed. We have broken them down into medium to long term. We are thinking of working with TCN to build an injection substation (132kv) towards Ibeju area to help address the areas where we are underserving today.

We are partnering with NDPHC on different projects within Agbara area. So there are a couple of things that Eko Disco is doing to ensure that we improve our consumer service. For me, the more energy I sell, the happier my customers get and the more returns I make. The more energy that is available for them, it also helps to bring down their own cost of doing business and we all understand that power helps every economy to grow.

What’s the average amount of power that you have been getting monthly in the last one year?

Last year was a bit of a challenge. Last year, generation dropped from what it was in 2021. This year, it has started improving. So, last year, I think on the average, I received about 360 to 370 megawatts. But today, I have distribution capacity of over 1000mw. So, I’m building gradually to ensure that it is  also sustainable and I look for collaborations with different energy suppliers, different energy mix.

Why did the partial power activation that was done by the market participants last year fail?

I can’t say it failed and I can’t say it has been successful, but there are lessons learnt. I would say that with the introduction of the partial activation last year, there has been some discipline in the sector. So stakeholders have upped their game, we are all being careful of not incurring liquidated damages. So, there is improved efficiency.

However, the gas challenge still remains; the vandalisation that is happening still remains, but these are things that government has been addressing. The securitization of premium waterfall for the gas companies has also given some level of assurance to the gas companies that they would get paid and that has improved and helped generation to some extent.

Towards the end of the year we should see some improvement. Some part of last year was really bad. This year is looking better and we hope that it continues to improve. So, in my opinion, I feel that that partial activation implementation was a good one, the right step in the right direction. I know that the regulator has been talking about Eko, Ikeja, Abuja Discos being the excellent Discos to start full bilateral. What it means is that we are looking to implement bilateral before the end of this year. When this commences, we will be dealing directly with the Gencos and that is when the real change will start in the power sector. So, I will buy the energy that I want, I pay for the energy I want, there is gas commitment for the energy that I want to buy. And at the same time, I know that the regulator is trying to be careful in ensuring that they are able to balance the grid, they are able to balance every other interest because everybody in Nigeria is also important, they are all entitled to receive power.

Currently, are Discos charging consumers based on cost-effective tariff?

For Eko Disco, we only increased tariff for the bands A and B consumers and those are consumers that are taking 16 hours power supply and above in line with regulatory directives. For those under band C, we didn’t increase their tariff. We looked at the model and we felt that we need to be able to justify and give them the improved service. So, if I improve your service and give you quality service, then you must be able to pay for same. What we try to do is to ensure that we give quality service commensurate with the charges.  So, if you are a band A customer for example, we try to give equal quality service, except where there are maybe technical issues or TCN preventive maintenance, in which case, you might not get that 20 hours. In all, I will say we are in compliance with the regulatory directive on tariff model. As an organisation, the goal is to charge our consumers a cost reflective tariff that is commensurate with the energy supplied and consumed by the customers.