The following article by Emeka Anuforo was published in the Saturday, November 9, 2013 edition of The Guardian. To view the original article, please click here.
The bid for the Enugu Electricity Distribution Company (Enugu Disco) was one of the most contentious of the lot. Fears of the preferred bidder, Interstate Electric’s ability to manage the facility post privatization raged, coupled with alleged political arm-twisting on its behalf. In this interview, Managing Director, Interstate Electrics, new owners of Enugu Disco, Mr. Robert Dickerman, told EMEKA ANUFORO in Abuja, that the firm would reposition the utility far beyond the expectations of Nigerians
WHAT experiences are you bringing to Nigeria?
I have been in the energy business my entire career, almost 35 years now. And I have been in the power sector for a long time, and I have managed utilities. I have seen a lot of the challenges in transformational markets. To be honest with you, one of the reasons Interstate asked me to come here and lead this effort is because I have a very strong interest in transforming markets.
Hopefully, the execution will be as good as the intent and some of that is up to our team, and we will be focusing very seriously on that. Bt the design of the privatization makes a lot of sense to me. I wanted to be part of it.
Preparatory to take over, have you done any preliminary studies about the customers that you will be servicing?
We have. The process that has been in place today has allowed limited traditional due diligence. And due diligence is the process where a buyer that is acquiring a company gets to learn about its business from its data, from talking to its management, from learning about its business processes, and everything else that one would want to know in order to develop a specific actionable, executable plan for what they are going to do after they take over the business.
In this case, the processes that were designed, because of some issues between the staff and government limited the amount of access that we had to the data, and to the management of the company. But within those restrictions, we still were able to get in there, and put in some shadow managers, and get some data and do some analysis.
The fortunate part of this is that we had a lot of industry experience on our side to enable us to interpret the limited information that we got to develop an actionable plan.
I am very confident that we had actually have a solid actionable plan on we are going to operate the utility for the benefit of customers.
Can you give an insight into this actionable plan?
The primary focus of our plan is going to be improving the service level of the distribution of electricity for customers. There is a technical component to that; there is a customer service component to that.
The technical aspect of that is equipment. We have to make sure that the equipment that exists is sufficient in terms of quantity, and quality to deliver electricity. We get a certain amount of electricity into our distribution grid from the national grid and from the transmission system, and we expect such quantity of electricity to go up substantially in the future years.
It will certainly increase substantially because of the NIPP generation assets coming on board, and then we expect it to increase even further over the years because of new additional IPPs. We expect more investments from other countries to build more generation.
But certainly, there is tremendous shortage even still, of generation capacity in Nigeria, and we expect new capital, new players to come into this market place to fill that void, and provide the generation that is needed into Nigeria.
As a consequence of that, we have to be prepared to deal with the new energy. The system at the Enugu Electricity Distribution Company was designed for a smaller quantity of energy coming in. We want to make sure that capacity is there not just to make sure that light is there today, but for the future.
The other thing that we have to do is that we have to manage the system controls aspect of it. So, when you are managing a network as wide as ours that services the entire South Eastern part of Nigeria, you have to make sure that you deal with what is called, congestion points. A congestion point could be almost anything that restricts the flow of electrons. Electricity is electrons flowing through lines. It is that simple. But there can be congestion points, because of the way that the grid was designed.
But we are going to put our engineers to work to try, and relieve those congestion points, so that electricity can flow freely across the entire network in the five states, so that when energy goes in there, whatever customers, whether they are industrial or commercial or residential that want to take energy off the grid, they will not be restricted by congestion points.
All of that is on the technical side of what we are planning to do, and we have much more specific plans that is behind that.
On the customer service side, we think that there is also a lot of opportunities for improvement as well both in terms of how the customers perceive us, and how the customers interact with us.
Many customers, we know, are very frustrated by the fact that they simply don’t have meters. Even worst, some customers have paid for meters, and have not received them. But then there are other customers that have not paid for meters, but they want meters. They want to be billed for their actual usage.
That is a very fair position for customers to take, we agree with them. We are going to be working very hard and very fast to procure quality meters that are tamper proof, that will get to customers, on their properties to measure customers, and we will start billing them on actual usage. But we also want to significantly improve the customer service interaction. If they have a problem; if they have an issue; if they have a complaint, we want to be available to serve them, whether it is telephone responsiveness or a web responsiveness, we want to be able address their needs and respond to them in a proper manner.
This is not just a desire. It is a regulation. It is required of post privatization for anyone who takes the time to read the regulations. There are service obligations that every distribution company has, and we plan to meet, and exceed every one of those obligations.
Once we are improving the quality of service, our expectation is that more and more customers will want to be part of this, they will begin to trust our grid operations, and people who have been bypassing meters will do so less, ideally zero, but we are not naïve about that. We hope that they will want to interact with us, and we expect them to pay their bills in full, and pay their bills on time and if they do that, they can help keep the rate down for everyone.
One of the reasons that rates go up is because of inefficiency in the system. Customers who don’t participate create grid inefficiency; customers who don’t pay in full create inefficiency, and when all the customers are participating, there is so much revenue in the system. That revenue goes back to the consumers in the form of lower tariffs. That is our objective.
We will use the utility to serve the public and to serve our customers. We are not an investment group like a bank. We are a service-business, and that is how we deal strategically view our business.
What would be the nature of your interface with consumers when it has to do with transformers breakdown or overloaded?
A transformer is simply one piece of equipment that belongs to a utility. Unfortunately, and we know some of these circumstances where customers have to purchase their own transformers to get basic service. We expect to own the transformers, and we shall be responsible for the maintenance of the entire grid, which includes transformers and lines, and substations and capacities, and a whole bunch of technological equipment that consumers should not be responsible for.
The line of demarcation between the consumer responsibility and our responsibility is their meter. Anything that comes before that meter should be our responsibility, and anything that happens post meter, inside their homes, yes, perhaps they need to call an electrician, if the wiring in their home is faulty. But anything that happens before the meter is our responsibility, and that is how utilities despicably operate, and we want to move towards that standard as quickly as we can.
What is your meter roll out plan like; how long do you hope to meter consumers in your coverage area?
It is difficult sitting here to give you 100% of our customers metered. But I can tell you that that is our goal, and it is our goal to get to that stage as quickly as possible. Not only do we want to get to the new stage, and it is going to require a lot of new funds, a great deal of funds, particularly when you consider the amount of funds that we paid to acquire these utilities.
We are going to be putting in a lot of capital, probably more than any other purpose, for the acquisition of meters. We are going to evaluate different meter technologies, and different meter vendors to see who can provide the best total packages for our customers.
What is the relationship with the Bulk Trader?
The structure that has been designed is that the Bulk Trader sits between the generators, and the distribution companies. With the generators, there is a power purchase agreement. When the generator sells and the Bulk Trader buys electricity, all of the electricity from the generator, and when one day there is surplus of electricity, and they don’t buy it all, they will pay the generator simply to be available ready to launch should the Bulk Trader call on them.
