electricity theft

Electricity theft is a problem as old as the power sector. It involves deliberately deceiving the electricity company by tampering with meters and stealing power from the grid. This illicit activity not only leads to significant financial losses for power companies but also undermines the reliability and stability of the electricity grid. Hence, it is vital to delve into and understand the impacts of electricity theft on the power sector and treat this issue with the urgency it requires.

Electricity theft is a problem for the electricity supply industry in many countries, with enormous consequences. In Nigeria, while Distribution Companies (DisCos) significantly bear its impact, the overall adverse effect of electricity theft affects the value chain.

Electricity theft allows consumers to use electricity without paying for it, thus leaving the DisCos with a huge liability. For example, electricity theft leads to the inability of DisCos to pay for electricity transmitted from the Generation companies (GenCos). This then reduces revenue to GenCos while increasing the cost of generating electricity.

An Association of Nigerian Electricity Distributors (ANED) report showed that over ₦30,000,000,000 (thirty billion nairas) of monthly revenue was lost to electricity theft, vandalism and meter bypass cases. This loss of revenue not only affects the financial viability of power companies but also hinders the ability of power companies to invest in infrastructure and equipment needed to improve power supply to electricity customers.

The impacts of electricity theft on the power sector also include the fact that the reliability and stability of the power grid are undermined. This occurs because stolen electricity is not metered and, therefore, not accounted for in the power company’s load management system. This gap can overload the power grid and cause power outages, particularly in areas where electricity theft is prevalent.

The implications of electricity theft can be harmful and life-threatening when electrical fires and explosions erupt. For instance, when people tamper with electricity meters and leave wires or connections exposed or loose, it can cause overheating and alight, putting anyone within proximity in danger.

Efforts to combat electricity theft in Nigeria have been ongoing for many years, with power companies and the Nigerian government implementing various measures to curb these financial losses. We see this in policies like the National Mass Metering Programme (NMMP) with the backing of the Central Bank of Nigeria (CBN). The aim is simple – promoting prepaid meters, which allow customers to pay for electricity in advance and reduce the incentive for electricity theft.

In 2013, the NERC formulated the Electricity theft and other related offences regulations to deter electricity theft and the destruction of electricity supply infrastructure. In addition to these measures, there is a need for more effective enforcement of existing regulations and laws related to electricity theft. These laws can be activated through greater collaboration between power companies and law enforcement agencies.

Furthermore, increased public awareness and education about the impacts of electricity theft on the power sector and accompanying consequences will deter prospective offenders. Taking a cue from the United Kingdom, the Nigerian government can extend the existing whistle-blowing policy to energy theft.

While efforts continue towards investment in the Nigerian Electricity Supply Industry (NESI), it is crucial to understand the system losses and take corrective actions to utilize the available power better. Eradicating electricity theft may seem far-fetched. However, with intensified efforts and very efficient systems in place, these losses can be reduced to the barest minimum.