A new report has identified that increasing commercial losses in the power distribution sector are contributing significantly to the continuous accumulation of debt in the sector.
It said despite the efforts made to clear energy sector debts under the Energy Sector Levy Act (ESLA), the debt, if left unresolved, could reach a total of US$12.5 billion by 2023.
According to the report, The Prevalence of Illegal Meters in the National Grid System, non-payment for power consumed and power theft through illegal connections are the principal causes of the commercial losses in the power distribution sector.
Electricity distribution losses for the first quarter of 2020 were 26.63%, with technical losses accounting for about 10% and commercial losses 16.63%.
The Electricity Company of Ghana (ECG) estimates annual losses from power theft to be worth roughly US$418.2 million.
Kodzo Yaotse, a policy lead for petroleum and conventional energy at the Africa Centre for Energy Policy (ACEP), presented the report during a webinar organised by ACEP on 12 April 2021.
Fundamental challenge
He described the Self-Help Electrification Programme (SHEP), the national scheme that seeks to bring electricity to areas not connected to the national grid.
SHEP requires communities to be within 20 kilometres of an existing 33kV or 11kV supply line.. They must be prepared to purchase all low-voltage (LV) poles that must be connected to establish the system and wire up a set minimum number of houses ready to receive electricity.
This has become a source of the fundamental challenge faced by the programme: the meters for SHEP are finding their way outside the designated areas for implementation.
“The incidence of the SHEP meters being used outside the designated locations has resulted in the increasing trend of illegal connections to the grid, especially in urban residential areas,” said Yaotse.
“These meters are considered illegal because they have not been processed to enable standardised readings or billing, among other things. Hence their consumption is not captured in the grid system, leading to commercial losses to the distributors,” he said.
He cited a revenue protection exercise conducted by ECG between December 2019 and January 2020, which led to the recovery of 10,142 illegal SHEP metres in total in the Ashanti Region.
Objectives
Among the objectives of the ACEP study, the researchers wished to verify the existence of these illegal SHEP meters to:
- provide empirical evidence on the problem,
- raise awareness,
- inform policy decisions for the reform of the electricity distribution system
The researchers sampled communities in urban and suburban residential areas of the Ashanti and Greater Accra Regions, prompted by perceptions that illegal SHEP meters are prevalent in these two regions.
Key informant interviews were also conducted with individuals who have knowledge and experience of illegal connections and how these operations are carried out.
Findings
The study identified 3,667 illegally connected SHEP meters from selected urban and suburban residential areas.
Over 70% of these meters had non-functioning LCD displays, hence the data showing how much power had flowed through them was inaccessible. As such, even if the distributor could locate the meters, it would be unable to estimate how much power had been consumed to enable it to effect retrospective billing.
The other meters identified showed very high consumption, some usage running as high as 28,320kWh.
Abortion meters
The study also revealed the disturbing phenomenon of “abortion meters”.
These are meters which are deliberately damaged by applying concentrated heat to the digital displays or removing digital components in the meter which allow communication with the power distributors. The tampering with the equipment is intended to erase records of consumption, especially when usage is very high, and prevent the meters from registering further records.
The report also alleged that some agents of the power distributors, including subcontractors and service providers who distribute meters, actively facilitate the misuse of meters and theft of power. They advise consumers on illegal connections and how to rig meters for private gain.
Recommendations
The study proposed that there be quick reforms to address the challenge of illegally connected SHEP meters, the wider problem of illegal connections and non-payment for power consumed.
“ACEP therefore recommends that ECG should immediately take steps to regularise all SHEP meters and eliminate the damaged ones,” Yaotse said. “It should adopt a whistleblower mechanism to support the detection of illegal connections in the system.”
The report suggested that ECG should overhaul its monitoring system to ensure that it is able to account for consumption of electricity through the system.
“Again, power distributors should monitor their staff and subcontractors in charge of installing and reading meters to identify the recalcitrant ones who are engaged in illegal connection for sanctions,” the report said.
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