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Electricity Customers Set to Enjoy New Deal
[July 15, 2014]

Electricity Customers Set to Enjoy New Deal


(AllAfrica Via Acquire Media NewsEdge) For so long, electricity consumers in the country have experienced several challenges, ranging from poor service delivery to having to pay exorbitant bills. EMEKA ANUFORO reports on fresh efforts by the Nigerian Electricity Regulatory Commission (NERC) to address customers' complaints JOSIAH Oko's residence is covered by the Ikeja Electricity Distribution Company (Ikeja Disco, Lagos). His challenge with electricity billing started a year before the privatization of the electricity utilities, previously operated by the Power Holding Company of Nigeria (PHCN).



When the federal government handed over the utilities to investors, Oko, like millions of electricity consumers across the country, had heaved a sigh of relief, thinking that a new era, where the consumer would be king, was being ushered in.

But his optimism was short lived. Instead, according to him, things began to get worse. Despite having a functional meter, he started getting "inexplicable estimated bills." Within months of the Ikeja Electricity Distribution Company's (IKEDC's) take - off, his bill jumped from the previous N25,009 to N80,000. Oko is dazed that the IKEDC resorts to estimation in computing his electricity consumption, when he has a functional meter. He has taken his case to the authorities, written several letters to seek redress, but all to no avail. He now wants the Nigerian Electricity Regulatory Commission (NERC) to intervene and rescue electricity consumers like him from what he describes as "exploitation." But if the postulations by experts are anything to go by, Josiah Oko and other electricity consumers like him should, indeed, be king. This customer/consumer paradigm shift was the focus of the NERC's Distinguished Lecture, held in Abuja recently.


Delivered by Editor of The Guardian, Mr. Martins Oloja, the lecture underscored the need to focus on the customer as "king." The programme also offered the NERC the opportunity to unveil its efforts to tighten regulation in the industry and ensure quality of service.

And as part of its move to ensure a better deal for customers, NERC explained it intends to release a new regulation to standardize cables and other electrical facilities used in the industry. The commission's only female Engineer, Mary Eniola Awolokun, who is in charge of engineering, standards and safety, is leading this new campaign.

Oloja fired the up the discussion by shifting focus from consumer advocacy to customer advocacy. His words: "Public sector operatives would like the easier description (stereotypes) consumer. The consumer in this context is likely to be demonized, cursed (and) blamed for failing to pay bills regularly. The consumer can thus be taken to court to teach him a lesson on how to be a responsible citizen But the enduring lesson is to renew our minds about a critical success factor in modern business: the power of the customer.

"Now is the time to be sensitive to an old saying that 'the customer is king.' All hail the brand new King. Which is also why, even in the public sector, wherever we are talking of transformation even as an agenda, those who are responsible for managing the process should remember an ancient word that has become evergreen that, 'Be ye transformed by the renewing of your minds." He described the paradigm shift as a model of empowered customer value driver, constructed to demonstrate how they could be an important source of brand value, asserting that customer advocacy would work in a different way for the electricity sector.

On the strengths of adopting the new approach, Oloja added: "Many companies have realized that there are advantages to being a first mover, with respect to advocacy, because once customers develop a trusting relationship with a supplier, they are much less likely to switch to a competitor. Trust creates a barrier to entry by increasing customer loyalty and by forcing would-be competitors to spend considerable time and resources to make inroads. If Quest's efforts in customer advocacy are successful, for example, the company could gain a leadership position in the telecommunications industry that competitors might find difficult to assail.

"Even when others do enter and try to gain customers' trust, the pioneers can maintain their superior positions, by continuing to innovate in the design of advocacy programs. In contrast, choosing not to embrace advocacy can present great risks to a company if competitors are able to gain the trust of customers first.

"In the same vein, there is a sense in which regulators and other stakeholders in our context can say, customer advocacy may not work in our milieu where customers are already disillusioned and angry because of poor service. Therefore, if this element exists, please do three things from this discussion: engage the angry customer, get closer to him, cultivate and build a relationship in peace time (even as electricity supply improves). This is the power that relationship building mechanism can give you." He drew attention to what two of the best scholars in marketing communication - Professors Keller and Kotler's advice in their book published in 2012 - Marketing is too important now to be left alone in the hands of marketing department of any organization.

He advised the management and staff of the NERC to hold electricity customers in high esteem. He said: "Customers can become advocates if they are treated better and if the product is of good quality." The commission's chairman, Dr. Sam Amadi said the regulator was investing in understanding the customer. "If we aren't learning fast on what the customer expects of us, we can't be a good regulator," he observed.

Amadi implored every stakeholder in the electricity market to become an advocate, noting that every encounter could change the dynamics of how customers perceive the regulatory body. He encouraged his staff to begin this advocacy in their daily interactions.

His said: "Word of mouth is not notional. It is real. Focusing on the customer is really the key." He said the NERC was committed to protecting the interest of the consumers and had established appropriate consumer rights and obligations mechanisms regarding the provision and use of electricity services.

Similarly, in the latest edition of the commission's in-house magazine, Amadi chronicled the issue of customer protection and how the Commission was dealing with it, within the context of the new privatized industry.

His words: "The morning after November 1, the chronic shortage of power did not disappear. Many customers continued to be estimated because they don't have prepaid meters and many communities continued to suffer blackouts because of system collapse. So, what has changed? "First, on November 1, we made a decisive turn towards the realization of the objective of the National Electric Power Policy (NEPP), which is to establish a long term electricity market structure in Nigeria, in which multiple operators provide services on a competitive basis to the broadest range of customers.

"Under such a regime, competitive market forces would be the best determinant of the appropriate and sustainable levels of prices charged by various carriers for their services. What has changed is that we are on course to establishing a competitive electricity market that can sustain adequacy and reliability.

"The challenge for this sector, post privatization, is to provide enough power for a financially resourced distribution company to sell to customers. Today, the Discos are not finding enough power to sell. The result is that they are not able to meet their revenue requirements and, therefore, unable to finance reinforcement of the network in a manner that enhances reliability. When Nigerians complain that they don't have power in their homes or offices, it is either that the Disco has not received enough power from the grid or the Disco has failed to strengthen its network such that it cannot reliably distribute the insufficient power it gets to the customers." In an article, the Chief of Staff to Amadi, Chikwerem Obi noted that the primary purpose of regulation was to protect the consumer.

He said: "Although customers have very definite opinions about whether or not the prices they are paying are too high, the determination of if, in fact, they are doing so, is a complicated matter. They need no complex investigative and adjudicatory processes to tell them when they are suffering from power failure. Adequate levels of service can be guaranteed more satisfactorily than price by customers' complaints on the one hand, and the 'conscience of the corporation' on the other. It is quality of service that tends to be more favourable to quality than to price because customers appear to be more concerned with safety, reliability and continuity of the service than in the price they have to pay. After all, the primary purpose of regulation is to protect the consumer.

"As electricity regulators, one of our duties is to ensure that utilities are providing value for money. Monitoring the quality of supply is an essential tool in the overall monitoring of the electricity market, and it is our job to strike a balance between cost efficiency and quality of supply, using a variety of regulatory instruments. Availability of data on the productive performance of the privatized utilities have not been encouraging. They suggest poorer electricity supply, lower voltage and poorer customer responsiveness.

"In all, improving quality of service in electricity regulation will have salutary effect on total change in productivity of the operators, more so, when it is integrated with regulatory benchmarking." Meanwhile, NERC has said that under the Customer Complaints Handling/Standards and Procedures Regulation, each Distribution Licensee, shall establish a Customer Complaints Units (CCU) within its premises and other locations within its area of operation. The CCU, according to NERC, shall be the first point for all customer complaints.

"Any customer dissatisfied with the outcome of the handling of his complaint(s) by the CCU or encounters delay/failure in the handling of such complaints may refer his complaint(s) to the Consumer Forum. In addition, where the Distribution Licencee and the customer are unable to agree on a resolution to a compliant, either party may refer the compliant to the forum," NERC said.

NERC has also called on Electricity Distribution Companies to make it a duty to expedite action on complaints brought to them by electricity customers, before they get to the NERC forum office.

Amadi said: "The structure of the forum members reflects fairness and knowledge, made up of people who will feel the pulse of the people because they live among them." The CCU of each Disco is meant to be the first stage of addressing customer's complaints, adding that the forum would handle complaints emanating from the distribution companies.

"Dissatisfied customers who still feel that they have not got the desired attention, or are dissatisfied with the outcome as addressed by the Discos can then appeal to the forum, being the next level of redress in the system. All further appeals from the forum are to be made to the commission for further redress. Where the customer still feels dissatisfied with the judgment, he or she is free to move the case to the conventional courts," Amadi said.

Each forum has five members with representatives from the Manufacturers Association of Nigeria (MAN), a non-governmental organization (NGO), the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), the Consumer Protection Council (CPC), and the Nigerian Society of Engineers (NSE).

Commissioner, Government and Consumer Affairs, Dr. Abba Ibrahim also noted that the setting up of the forum's offices was to ensure that customers have a say in what affects them as customers of electricity providers.

Copyright The Guardian. Distributed by AllAfrica Global Media (allAfrica.com).

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