Monrovia – Since the rehabilitation of the Mount Coffee Hydro Plant, relative progress has been made on Liberia’s national electrical grid, but the gains are often overshadowed by power outages and poor customer service mainly created by theft and a stack of unpaid bills.
Report by Alpha Daffae Senkpeni, [email protected]
The statistics are relatively impressive comparing to five years back when the energy sector was in tatters. Garnering the support of several international partners, the government of Ellen Johnson-Sirleaf made some inroads in remedying the country’s power jinx.
The supply of electricity has upped from approximately 16 megawatts in June 2017 to 31 megawatts in June this year, according to the Liberia Electricity Corporation or LEC.
The company says demand for power will continue to surge and will reach 50 megawatts by January 2019. And the maximum demand for energy before the end of 2019 is expected to be 74MW and by 2020 it will increase to 106MW when over 60,000 customers will be connected to the network.
The LEC is optimistic about connecting 11,000 new customers to the network before the end of this year and will add 150,000 more over the next three years, thanks to supports from international donors. This would significantly impact the local economy by reducing the cost of electricity for businesses.
However, maintaining the current performance amid the hurdles of a compiled hefty unpaid bills and the inconsistency of power theft has been a complication for the national power company.
Small Businesses Enjoy Gains, But…
Hundreds of small Liberian businesses are now connected to the electrical grid, and although they still have some concerns about its efficiency, the cost is cheaper than running a generator.
“If LEC is consistent it makes me relax so I can focus on improving other aspects of my business to take it to another level,” says Cliff B, owner and manager of a popular bar in Paynesville city.
Before Cliff connected to the network, he faced hard times worrying about fuelling and maintaining his generator – spending over US$200 monthly. Now he spends about US$120 a month on LEC bills.
“I used to lose my customers when my machine breaks down, but since I have the LEC current, I keep it (machine) on standby and it helps my business to look more organized because when I have foreign customers they expect me to be at a normal business level which means having cold drinks and current,” he explains.
Friday Yallah managers Top Line Incorporated located downtown Monrovia; he says unlike using a generator, subscribing to the LEC network is economical. But it also comes with some disadvantages, he adds.
“In the case of the LEC, when your meter goes off you will call the guys from LEC to come and fix the meter and they will take up to one or two weeks, when you bad lucky one month for the guys from LEC to come. So, that is the bad side of LEC, they need to step up their game in responding to customers service,” he said.
“LEC needs to add their manpower up so that they can be effective. Many people need current but they cannot get it,” adds Lincoln Gardour, manager of a sports bar on Randall Street.
These are concerns swirling across the LEC network of customers and are well corroborated. Household customers are raising the same issues, but the company claims there are other factors impeding efforts to curb the problem.
Debts, Thefts Cause Outages
Before the new foreign management team took over in January 2018, the company was experiencing a total of 185 hours of power outage, says John Ashley, Chief Executive Officer of ESB International – the Irish firm currently managing the LEC.
The arrangement for an international private company to run the affairs of Liberia’s national power company was borne out of the Millennium Challenge Compact, a US$257 million grant from the United States of America. The agreement sought to improve the productivity of the autonomous agency in order to solve Liberia’s energy demand and make economy viable.
Since the firm took over in January, it is scooping the supports of international partners to improve the network and the statistics appear impressive.
LEC was able to reduce the outage time to 66 hours from the previous185 hours between February and June 2018 – an improvement of 54% in network performance.
This has prompted commercial and large industrial customers like Coca-Cola Factory, Monrovia Club Brewery and several big hotels to begin making requests to get connected.
But because of the vast number of illegal connections to the network, huge numbers of transformers have burned out due to severe overloading and bypassing of protection devices, Ashley told FrontPageAfrica during an exclusive interview.
“Because of the high level of commercial loses LEC experiences, [which is] caused by illegal connections, bypassing meter, non-payment of bills, we are running at an approximately 40% loss – LEC is effectively losing US$49 of every US$100 it generates at Mt. Coffee,” he said.
“It’s a huge lost here even with Mt. Coffee running and generating power at a very low cost, because we are only getting less than 50% of our cash; this is really causing serious financial condition for the company.”
And while the company struggles to deal with power theft, it is stacking loads of customers’ bills at the same time and falling short of procuring equipment in order to respond to breakdowns or power outages.
Its transformer repair facility only repairs a set number of transformers at a time and cannot solve all the problems simultaneously due to scare resources.
Before January of this year, LEC was in what the management terms as “financial distress” due to the huge debt it was owed. It had also incurred a debt of US$22 million it owed vendors, but has managed to scale down its own debts to stabilize the company.
Gov’t, LWSC are Main Debtors
On the other hand, LEC customers owed an excess of US$9.5 million in unpaid bills. Amongst the debtors, the Government of Liberia owes US$ 4.23 million and the Liberia Water and Sewer Company owes US$2.3M by the end of June 2018.
Post-paid debts for private customers also stood at US$5 million beginning January 2018. The government has reportedly made some payments but LWSC is yet to make any so far.
“It has huge impact on us , because there [are] lots of things we want to buy – materials, equipment, tools and vehicles – to go out and do repairs and make new connections to the network, but with this level of debt it’s very difficult,” Ashley said.
The company then launched a disconnection campaign in March to ensure customers pay their bills. It consequently impacted the reduction of post-paid debts from US$5M to US$3M.
The company recently announced that it will continue to reduce illegal connections and begin adding 11,000 new customers to the network.
“In August [this month], we will be receiving estimated 6,000 meters and it’s intended to use these meters to replace the estimated 3,000 faulty meters and use the balance to connect new customers including 2,000 new ones that have applied ,” he said.
Donors are ‘Absolutely Crucial’
Mr. Ashley reckons that supports from international partners to address Liberia’s energy needs are “absolutely crucial”. His comment is backed by a range of supports coming from the MCC, the European Union, Word Bank and African Development Bank amongst others.
“Having the donors programs is crucial to the LEC solving its problems because if they were not here, we will have a major problem,” he said, while also disclosing that the Millennium Challenge Account Liberia or MCA-Liberia, which managers the MCC compact, is preparing to procure US$1.5 million worth of vehicles, transformers, cables and poles to enhance the performance of the LEC.
As part of the compact signed in 2015 – and entered into force January 20, 2016, MCA-Liberia manages the US$257 million grant intended to boost the country’s energy and road sectors. A massive chunk of this amount is going toward the energy sector which included the rehabilitation of Mount Coffee.
“MCC was the largest donor to the effort, and I am happy to report that the project recently reached an important milestone when all four of the plant’s turbines went online,” writes Jonathan Nash, Chief Operating Officer of the MCC, after his visit to Liberia in July 2018.
“The plant can now produce 88 megawatts of power, more than doubling the power generation capacity of the entire country. The project is expected to provide power to 460,000 people, lighting the way toward a brighter future for Liberians.”
The compact is rendering significant technical, administrative, human resource and material support to the national power company and should continue until 2021 when the agreement elapsed.
Donor projects will bring the total connections this year to approximately 11,000 new customers and over the next three years, over 150,000 new customers will be added to the network, the LEC CEO told FPA.
Supports are also coming from the World Bank, African Development Bank, the European Union and several other international partners. Last week, the EU provided to the government an amount of US$21.5 million to fund the construction of new electricity transmission lines and substations in Monrovia.
Possible Price Cut
The future of Liberia’s energy sector looks bright but as it stands it is at risk due to incurring huge losses from power theft and delays in payments of bills. It is also making it difficult for the management to reduce the current price of US$0.35 per unit any time soon.
Nevertheless, the LEC says a “cost of service study” is being conducted to determine the possibility of recommending a new tariff per unit which might assumingly lead to a sort of reduction that might include a “lifeline of social tariff” to support the government’s Pro-poor agenda. This will particularly target households that consume limited power.
Another possibility of reducing the price would involve reducing commercial losses, Mr. Ashley insists.
With support of the MCA-Liberia, LEC management is also looking to improve its marketing and customer services in the coming months.
But to curb power theft, it says, would require the amendment of the law that will consider power theft as an economic crime.
“Instead of treating electricity theft as misdemeanor, you look at the bigger picture that it’s damaging the economy and LEC’s assets, it should be classified as an economic sabotage then it moves from a misdemeanor to a felony,” he said, adding that LEC is augmenting its legal team.
Power Gap Looms
Also, there are concerns lurking that the dry season will create gap in power supply and create huge cost for producing power. The total power grid of the hydro will tremendously reduce from around 80MW to 10MW, shifting more attention to the thermal facility on Bushrold Island to fill the void.
Mr. Ashely disclosed that the company has disbursed US$2.9 million to procure heavy fuel oil (HFO) that will be used to power the thermal plant during the dry season.
The thermal plant produces 34MW, a capacity expected to complement the 10MW of hydropower. Presumably, there will be an energy gap of 6MW to 15MW should any of the thermal plants becomes faulty during the next dry season.
“This energy gap would last for the entire dry season and would require a series of planned rolling power outages to manage the deficit,” he warns.
However, the company says it is also planning to refurbish nine of its out-of-service 1MW high-speed diesel generators to partially fill the projected energy gap during the dry season.
For the long-term, progress is being made to expand the power gird by connecting to a regional energy network, while the World Bank weighs-in on funding the construction of another hydro dam reservoir further up the St. Paul River and the expansion of the Mount Coffee Hydro to generate additional 600 MW from the additional new plants.
But the persistent piling of debt and with little done about ending theft, LEC might just go back to struggling when the hydro loses some of its water during the dry season.