One of the largest contributory factors to the commercial losses and liquidity challenges that accrue to the power sector is the theft of electricity which is illegal and should be given stronger regulatory backing than the current inactive structures in place in the Nigerian Electricity Supply Industry (NESI).
With the reduction of Aggregate Technical, Commercial and Collection Losses being a key performance target for the distribution companies (Discos) who exist as the backbone of the industry operating as collection agents, it is critical and of utmost importance that the theft of electricity be given substantial weight with deterring sanctions; as these companies and other players in the value chain have made significant investments in the sector to ensure the availability of electricity at optimum and expected levels.
Electricity theft is a threat to the entire value chain. Although its impact is borne substantially by the Discos in terms of loss of revenue, the overall effect of theft of electricity affects the value chain in totality.
One Disco recently published that it loses N21 billion annually to theft of power, thus amounting to an estimated average of N231 billion for the entire industry.
The impact of such criminal activities robs legal customers of available electricity and ultimately returns on investment to the companies.
Laws and Regulations prohibiting Electricity Theft
The Laws and Regulations frown against electricity theft and impose stiff penalties for offenders although the applicable regulation as formulated by the Nigerian Electricity Regulatory Commission (NERC) is still in its draft form and hence not in full force and effect.
S.94 (3) of the Electric Power Sector Reform Act (EPSRA) provides that ‘Notwithstanding anything contained in any other law, any person who wilfully 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.
The Miscellaneous Offences Act (MOA) also contains provisions dealing with tampering with electrical equipment.
S.9 of the Act provides 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 offence and liable on conviction to be sentenced to imprisonment for life.
S.10 of the Act goes on to provide 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 offence and liable on conviction to be sentenced to imprisonment for life.
Although the EPSRA by S.94 (3) supersedes all other law(s), nothing stops the courts from using its discretionary powers to enforce the MOA which contains stiffer penalties for electricity theft offences. However, the regulatory instrument which would give stronger credence to the weight of the offence of electricity theft has not been given the force of law to augment the existing laws currently available at the disposal of the courts.
The Electricity Theft and Other Related Offences Regulations
The regulatory instrument (Electricity Theft and Other Related Offences Regulations) was formulated by NERC in 2013 to deter electricity theft, and the destruction of electricity supply infrastructure.
By the provisions of the regulation, any person who wilfully and unlawfully taps, tampers with a meter, installs or uses a tampered meter, receives electricity supply by by-passing a meter, or uses any other device or method which results in diversion in a manner whereby electricity is stolen or wasted, damages or destroys an electric meter, or causes or allows any of them to be so damaged or destroyed as to interfere with the proper or accurate metering of electricity, to abstract or consume electricity or knowingly use or receive the direct benefit of electric service through any of the acts mentioned in the regulation or uses electricity for the purpose other than for which the usage of electricity was authorised, 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 the Regulation.
The offences are punishable with terms of imprisonment as applicable under Sections 390 of the Criminal Code, Section 287 of the Penal Code or with imprisonment for a term of three years under the regulation or with fine or with both fine and imprisonment.
It also covers theft of electricity lines and materials punishable under the referenced laws and also Section 94 of EPSRA. Damage to electricity infrastructure and electricity lines constitute offences under Sections 451 of the Criminal Code, Section 326 of the Penal Code and Section 94 of EPSRA. The offences are punishable under Sections 450 of the Criminal Code, Section 334 of the Penal Code or Section 94 of EPSRA. The regulation details punishment for third party offenders (aiding, counselling, abetting, etc), persons who receive stolen property, persons who interfere with meters or works of licensees punishable with a term of imprisonment and/or fine. Companies are also subject to the regulation and staff of licensees.
Theft of electricity within the regulation is a strict liability offence.
Section 2(1) of the regulation authorises licensees upon detection of such theft of electricity to immediately disconnect the supply of electricity.
The regulation contains an incentive scheme by way of monetary reward to any person who reports to the Commission or the Nigerian Police or other law enforcement authorities any act which constitutes a violation of the regulation (Section 14).
The Way Forward to Combat Electricity Theft in Nigeria
With strong deterring provisions contained in the laws as enumerated, what steps can be taken to strengthen the drive to curb the menace of electricity theft?
The need for the implementation and enforcement of the Electricity Theft Regulation
With the current low generation in the industry, the need for the implementation and enforcement of the draft regulation becomes more pressing in order to prevent further loss of power to theft which could have otherwise been diverted to meet customer demands. Licensees are therefore urged to embark on a strong and proactive advocacy with NERC to see to the immediate approval and passing of the regulation by NERC which will also demonstrate the regulators’ support for the efforts being made by licensees particularly the Discos to fight electricity theft.
Any further delay in the implementation and enforcement of the regulation 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 the Performance Agreement. Ultimately, the causal effect on Discos revenue(s) will widen the already increasing sector liquidity gap.
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 preconceived notion by the average Nigerian consumer that power is a social good has to be erased from the minds of consumers via enlightenment initiatives in order to wean them off the entitlement mentality that drives power theft.
Designation of Special Courts to handle Electricity related offences
There is an urgent need for the intervention of the Judiciary through speedy and efficient justice dispensation via the enforcement of existing legislations to help stem the unrelenting trend of electricity theft. This can be achieved by the designation of special courts to handle electricity related offences. There is a need for the Judiciary and power stakeholders to closely work together.
Training Programmes and Workshops for Judges
Organised training programmes should be developed for Judges that will be designated to handle such electricity related matters in order to help acquaint judges with the commercial, legal, regulatory and certain technical framework peculiar to the electricity industry.
Engagement with Security Agencies
Active engagement of the Discos with the relevant security agencies within their respective distribution zones needs to be undertaken to ensure collaborative efforts in tackling electricity theft.
Setting up of a Power Desk at various Police Stations and Civil Defence Offices.
There is a need for the dedicated personnel of the Police and Civil Defence as law enforcement agencies to be adequately trained and sufficiently mobilised to guarantee their active involvement in tackling the crime of electricity theft. This will definitely send a strong deterrent signal to the general public.
National Anonymous Tip Line
Customers must also be actively engaged and provided with opportunities across multiple communication channels to report incidences of electricity theft anonymously.
The importance of the eradication of electricity theft cannot be over-estimated especially given our power supply deficit and the need to attract significant capital investments in order to improve availability, access and service delivery in the industry. With the right signals and messages in place, consumers would be mindful of the impact of such criminal activities on the entire electricity value chain. More importantly, revenues that would accrue from the incidents of the crime would be otherwise diverted by the Discos to undertake investments that will assure stable power supply which would ultimately result in the growth and development of the Nigerian economy.
The views and opinions in this article are those of the author and do not represent views or opinions of The Energy Intelligence