PHCN’s Bogus “Service Charge”

Nigerian consumers are blue in the face from complaints of epileptic or totally absent power supply from the Power Holding Company of Nigeria (PHCN). Out of frustration, we have all become mini or micro power generating units via our creative options of generators, inverters, solar, wind and good old candles and wick lamps; anything just not to have to endure the darkness one more night. As if the situation is not humiliating enough, PHCN is still stealing us all blind!


My Story

Like every consumer, I am forced to connect to the PHCN grid because it is the only one available. A few years ago, they introduced the pre-paid meter in pilot schemes across the country. Being a discerning consumer, I was skeptical of the new system as we still had tons of issues with the old one. The only thing that was regular on the old system was the bill, not withstanding that you may not have consumed up to 10 hours of electricity in the entire month.

I was eventually ‘forced’ to switch over to the pre-paid system October last year because PHCN was phasing out the old meters in my area. My first shock was that the company effecting the switch came in, connected a new meter and just took my old one away! When I demanded for it, I was informed the meter was PHCN property though we had paid for it when it was installed.

At my local PHCN office to purchase units on the pre-paid card, I discovered I had to pay PHCN N50, 000 for the new meter installed or spread the payment over 24 months. Since I was paying for the meter, could I have it issued in my name because, as a tenant, my landlord would probably not refund the money? Well, in PHCN logic, to get that privilege, I had to write an application to the Marketing Manager begging for the opportunity of getting the meter issued in my name.

Since the process could take weeks and they refused to open a temporary account meanwhile, I agreed to start paying under the old name and spread the payment over 24 months. In a normal environment, one would expect that the meter would be my property on full payment but no, it will always remain PHCN’s property! So why am I paying for something that I would never own? This is the first rip-off.

PHCN makes the consumer pay for an equipment it has no intention of releasing to him. When I requested for an explanation, I was just told ‘that is the procedure, madam’. In actual fact, PHCN (I keep typing NEPA) does not own the meters. They belong to some private companies who have signed the deal to provide the equipment so PHCN would not need to outlay the capital to buy them. So consumers like me are paying the companies back for the investment; the only questionable thing is that the company still owns the equipment even after I have paid for it or does it now revert to PHCN? That clarification begs an answer.

Either way, PHCN appears to be forcing consumers to put up the capital for it to acquire an essential part of its service delivery. But because we are’ investors’ under duress, we do not get any dividend for our ‘investment’.

Rather, we are charged a service fee of about N700 every month for using equipment we are paying or have paid for! It is double jeopardy.

Imagine that you wanted to access the internet and an ISP sells you an EV-DO card at N10,000 to enable you access their portal, and then charges you N700 every month for the use of the card which you must return back to them if you are relocating to Ghana because it was their property all along! What was the N10, 000 for if they owned the card anyway and could get it back when they please? It’s a fraud.

To add salt to the injury of such rip offs, I had a recent encounter with the draconic system PHCN runs in the name of service delivery. I purchased units last in March because, since then PHCN had not provided service to my area until early July. Since I had over 500 units left on the card, it didn’t make any sense to keep making additional purchases for services not delivered. The service got slightly better from the first week in July (from about 2 hours a week to 5 hrs a day now…great improvement!) so I sent a help to refill. Imagine my shock when he came back to say that we ‘owed’ PHCN N12, 500 and could not make any new purchases until we cleared the debt!

How do you ‘owe’ a service provider on a pre-paid scheme? If anything, it was PHCN who owed me for more than 3months by not providing the service I already paid for! On further investigation, the Marketing Manager Ogba Undertaking, Mr. Ajikobi explained that I was in arrears for the monthly installments on the meter. Since I didn’t make any purchases in 3 months, the installments had accumulated so I had to clear it. No remorse for the fact that it was PHCN’s incompetence that created the lull in purchasing activity. If they had been consistent on their service delivery, would I have been in arrears? That is the service delivery one million dollar question.

One would expect that since this is an ongoing relationship (not that I have any choice because PHCN is still a monopoly enforced by federal legislation) the PHCN Management would be smart enough to make these deductions elastic to cover 24 transactions instead of 24 calendar months; especially since they are aware that their system is anything but efficient and the default would most likely be from their end more often than the consumer. But why should they care? They are legalized to extort money from helpless consumers by our own supposed “democratically elected” government with no structures to call them to order!

The one that knocked me off was the fact that my arrears also included service charges for those 3 months! Service charges? Which service did I get from PHCN between March and July that I owed them for? We did not get power in my area for up to 48 hours in almost 90 days! Is that the service I was being charged for? With systems like this, is the Federal Government condoning the biggest extortion racket in Nigeria? How does a government run a service delivery structure like PHCN that demands payment for services it did not provide? If PHCN was a private sector business, consumers could at least seek redress by reporting to government, but who do we report PHCN to? The same Minister who oversees their structure?

Is PHCN another subtle channel to tax Nigerians to death because the only payment you must make without getting commensurate services is a tax? Is the ‘service charge’ actually an Energy Tax rigged through the back door? The Honorable Minister needs to clarify that for the Nigerian consumer because he oversees a structure that robs the consumer of choice and levies a flat monthly fee on all subscribers irrespective of whether the system delivers on its promise or not. That is taxation.

Will the Honorable Minister please advice his boss that the solution to Nigeria’s Power Trauma is for this administration to think outside the box (for once) and attempt total deregulation with the strategic separation of domestic from industrial power consumption? The model is simple, immediate and implementable and I would be glad to forward it to him if he sends his e-mail. At least, it will break domestic consumers’ dependence on epileptic and draconic PHCN by increasing our choices while the government can focus on industrial generation… and no, I am not a power or energy expert or consultant, just a mere frustrated consumer who bothered to think of a creative solution to deliver me from the oppression PHCN has become to my existence! I am sure there are millions like me all over Nigeria.

Meanwhile, I have since paid the disguised “Energy Tax” just so I can supplement my 3 generators with PHCN’s epileptic service but I am seriously considering court action to challenge the power dragon’s rights to charge me for services I did not receive? Is there a lawyer out there willing to represent me in this iconic suit? Maybe if we stretch them thin, they will adjust their unreasonable system and learn how to earn every kobo we pay them for once.

I close with this thread on my Facebook page about energy and service delivery
Breaking News: The UK Energy Regulator OFGEN is to fine EDF an energy service provider £2m for poor customer service! Someone please beg our regulator NERC to fine PHCN too o! Maybe like N100 billion for the trauma consumers endure in Nigeria. Or am I asking the impossible?

Oyefeso T
Yes, it is impossible because the CEO of NERC probably has a 100KVA generator in his house donated by a generator brand and a monthly supply of 500litres of diesel from the importers.

Segun A
Accountability in Nigeria? Phew... Alice in Wonderland!

Wunmi A
Things can only work out in the power sector if Federal govt could ban the use of generator set and its importation, maybe our great State (Lagos) can start that by formulating a policy that will stop or reduce use of generator. Though, it will be very difficult to do but, if Nigerians can sacrifice that we'll all laugh soon.

Kelvinmary P. N.
@Wunmi: Chopping off a head is not the cure for headaches... there are better ways.

Babatunde O J
The problem is much deeper than you can see. If we ramp up production as in megawatts, then failure point is distribution since both equipment and wiring are old and in some cases unable to carry the increased load coming from additional production without significant reinvestment... Of course you can always ask where the monies spent over the past 10 years went... This one pass regulator...


Obaro E
Yes, you are asking the impossible. I don't mean to sound pessimistic or 'unpatriotic', but when supposedly educated people in a country do not believe there is a problem when PHCN cannot guarantee 6 hours supply of electricity after almost 50 years of independence, we really are in a mess.

Sola Salako
Am I the only one who sees the solution to this problem? It’s right under our noses; Develop a unique policy for Nigeria that separates domestic consumption from industrial and encourage micro individual generation via green options like solar and wind while govt focuses on industrial generation. The model is simple, workable and sustainable. But it requires executive will, commitment and sincerity; all qualities that are obviously deficient in this administration. We are at the mercy of the Abuja Circus. God help us!

Ronke A (UK)
Many drops make an ocean. The energy providers in the UK had a history of dancing to their own tunes. Even when housing providers (as opposed to the individual consumer) liaise with them, they respond to enquiries when they feel like, paper trails go missing, site appointments are not kept… yes all this in the UK! It took some doing but an example has been made and service is bound to improve. Where there is a will . . . . .

Babatunde O J
@Sola: this solution has been very clear for some years now... It took a Nigerian to use this model to solve power problems in an East African country some years back... The issue is exactly what you have said... they think it’s a circus... Of course you guys know you will have to delete diesel and generator traders while you are on this path. But please also wipe out trailer and truck haulage of goods and revive the rail system for travel and cheaper haulage of goods while you are ahead...

Elvis E
Who says we need a national grid? Why can't we have regional, state & or even ward grids? This is one urgent thing that ought to be changed in the constitution; let states generate & distribute power as they see fit. Let states be able to sign PPP power agreements. The competition betwixt the states will ensure power supply is regularized according to demand. Breakup the national 'greed', oops! grid, Let there be LIGHT!

Dele V B
Micro generation [using solar, wind, biomass, tidal waves e.t.c] seems like an attractive option going forward. The government still needs to provide a functional, reliable and efficient national grid network. Also, supply, generation and local distribution companies have to be encouraged, regulated and incentivized. Having said this, natural gas is available in abundance and this should serve as our competitive advantage for industries - the resource is being flared/wasted in the Niger-delta by this government. To conclude, a coherent, comprehensive and articulated energy policy has to be owned by this government. But with or without government help, micro generation is bound to get more popular in Niaja (sic) even as initial costs fall worldwide!

Babatunde O J
@Dele: While some of these technologies are still in nascent stages, micro generation is truly very attractive. The issue is we will need to knock Abuja with a very big stick indeed to get them to pave the way... In the US, this option is becoming closer to reality as we speak since they want to reduce dependence on foreign oil and gas. Let's get some truth into this thread... any energy policy that unbundles power production will be strongly resisted by the central government! We need a new TYPE of government then we will get all we are asking for!!!

Omidan O
Power Holding Company of NIGERIA (PHCN) ... thinks they are doing a good JOB! Dem dey HOLD the power well well! Can you imagine a govt that wants to improve on ELECTRICITY would budget a whooping N2 billion for diesel! What else can we expect?


Ailen A
100 billion is an understatement. Something far more will do. Can someone just tell PHCN to stop bringing bills to my house? My household has finally resorted to solar power, inverter and ‘I better pass my neighbor’ generator. This people still dey bring bill. I think well over N900billion fine will just be fine.


Ethel O
To my mind, PHCN is acting in accordance with its name. If I am right, its responsibility is to "hold power" and not to supply it to the ordinary Nigerians who are in dire need of it on a daily basis. Tell me an economy anywhere in the world that does not revolve on a maximum supply of power. I wonder what all those "learned men and women" really learn when they travel overseas and see that things function differently. In fact, a N100 billion will be a mere pat on PHCN’s back for the harm that it causes to the common man, young and old alike.