Can LEC Solve The Growing Demand of Electricity in Liberia?

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LEC CEO John Ashley

-Top Business Owners hopeful

Despite numerous supports from the World Bank, the Liberia Electricity Corporation (LEC) connections or distribution statistics has shown a slow or downward trend of power distribution, especially for businesses.

According to LEC, the corporation has approximately 53,500 registered customers, of which 52,900 are prepaid and 600 are post-paid customers, a result that many people, including community dwellers have described as “discouraging and low” for Montserrado County due to its population.

“We have about 1.5 million people in Montserrado County and having less than 100,000 households connected shows or indicates that authorities at LEC need to increase connections or distribution,” Francis Kortu of Battery Factory Community said. Kortu, a businessman residing in the Battery Factory community along the Somalia Drive, says he has tried numerous times to get an LEC connection at his house, but to no avail. For the 7-member household, including his mother, they use cheap battery-operated table-top lights sold on the street. The Battery Factory community is yet to be connected to the LEC grid. Apart from the table-top lights, Kortu uses a 1.5 KVA generator only sparingly, over the weekends and holidays, due to the rising costs of generator fuel and the costs of maintaining the generator in the first place.

In January of 2018, a new management, headed by John Ashley took over the corporation with a clear promise of increasing power to homes, businesses and building the capacity of its staff.

At full capacity, LEC is expected to produce up to 88 megawatts of power, though it is not clear how much the corporation is currently producing. However, only 30 megawatts of capacity are being consumed or distributed currently. Additionally, LEC charges 35 U.S. cents per kilowatt (tariff).

However, John Ashley indicated that the government owed US$4.23 million while the Liberia Water and Sewer Corporation (LWSC) US$1.3 million were hampering the LEC’s operations.

“When ESBI took management control of LEC on 8th January 2018, the Government owed LEC $3.2M and the Liberian Water and Sewaer Corporation owed LEC $1.3M. LEC management have engaged continuously with the Government on the amount of money owed to LEC for electricity bills and have received some payments from the Govt. in the last 7 months,” Ashley told the Daily Observer in an interview.

Established in 1975, ESB International is wholly owned by the Electricity Supply Board, Ireland. Headquartered in Dublin, Ireland, ESBI is a leading engineering consultancy firm to the power industry.

Ashley said the debt owed to LEC by the Government at the end of June 2018 remains at $4.23M, stating: “We are currently in discussions with the Government with a view to receive payments.”

According to Ashley, most businesses who are indebted to LEC are post-paid customers as opposed to domestic customers, who are in the vast majority prepaid customers.

At the beginning of January 2018, Ashley said post-paid customers’ debt to LEC was US$5 Million, which led to LEC commencing a major campaign in March to disconnect post-paid debtors from the network.

“At the end of June, over 270 disconnections had taken place and the post-paid debt had been reduced by approximately US$2 Million. The disconnection campaign is ongoing and the effort will be significantly ramped up in August 2018 in order to completely eradicate this debt,” Ashley said.

Commenting on the Liberia Water and Sewer Corporation (LWSC), Ashley said at the beginning of January 2018, LWSC owed LEC US$1.3 million, adding “at the end of July 2018, this debt had risen to approximately US$2.2 million.

He said despite a number of discussions with LWSC management to pay the money, LEC is yet to get any assurance of payment.

Ashley said due to a shortage of meters in stock, the management has approximately 4000 new connections made from January to June 2018.

He said with deliveries of new meters due in this month, a further 8000 new connections will be made this year plus the replacement 3000 faulty meters.

According to Ashley, approximately 2000 domestic customers and 65 commercial customers have applied for connections in recent time and will be connected after the arrival of new meters.

“The large inherited legacy electricity debt, the very high levels of inherited liabilities and the ongoing non-payment for electricity consumption by Govt. institutions, are major concerns for LEC. In addition the very high levels of commercial losses (49%) arising from illegal connections, bypassing of meters and non-payment of bills, are huge problems for the financial stability of the corporation,” Ashley said.

LEC’s activity in this area is restrained because of the very difficult financial situation the corporation is facing, indicating that “as our financial stability improves, LEC will be in a position to be a significant contributor.”

Sam Mitchell, proprietor, Corina Hotel, said the LEC power outages have reduced over the year, and he hopes that his business would be connected soon.

Sam Mitchell, CEO, Corina Hotel

Corina is one of the prominent hotels in Sinkor and well known for their hosting of conferences.

“Currently, I spent around US$10,000 monthly on fuel and servicing of the machines. I will spend less or half of that if connected to LEC,” Mitchell told the Daily Observer.

According to him, the connections of big businesses will enable the LEC to generate more money and enable them to expand connections to homes and smaller businesses through revenue generation.

“I asked LEC since last year to connect the hotel, but to no avail. I spend more money just on fuel and will keep engaging the LEC to ensure that my business is connected. I’m using LEC at home, which is very stable,” he said.

Amin Modad, Chief Executive Officer of Bella Casa Hotel and Suites, calls on LEC’s management to design strategies that will enable the utility provider to generate more revenue from top businesses.

“I spent between US$12,000 to US$13,000 monthly just on fuel and servicing of machines. LEC needs to design new ideas that will give them more money, especially during business with some of the top hotels,” Mr. Modad said.

“LEC can generate US$100,000 plus [monthly], just by doing business with hotels. Additionally, LEC needs to give flat rate to top businesses or large consumers of power, which will help LEC raise more money and also help businesses. I was using LEC, but then, my bills increased to around US$20,000 and had to stop,” Mr. Modad explained. According to him, the bill went higher because, due to the instability of LEC power at the time, he was constrained to toggle between his generators and the grid.

According to him, LEC has the capacity or power to serve many or all businesses in the country and will allow the corporation to generate more revenue.

“There is surplus of power during the dry season since the coming into force of the hydro, but not being distributed. The redesigning of distribution strategies by the corporation will greatly impact connections and distribution,” Modad noted.

Bella Casa is also one of the prominent hotels in Monrovia with suited environment for conferences.

Amin Modad.jpg
Amin Modad, Chief Executive Officer of Bella Casa Hotel, located in Sinkor, Monrovia

“On arrival in January 2018, ESBI were faced with a network that was suffering from a huge number of lengthy power outages. For example in the period February to June 2017, there were a total of 185 hours of power outage,” Ashley said.

According to him, in order to improve the reliability of power in the electrical network, ESBI brought in one of their systems protection specialists from Dublin in February of 2018 to examine the system. By implementing the recommendations made by this expert, LEC was able to reduce the total outage time, in the period February to June 2018, to just over 66 hours, an improvement of 54% in network performance. This improved reliability has encouraged commercial and large industrial customers to request LEC connection to the network.

He said when ESBI arrived in January 2018, no provision had been made for the purchase of heavy fuel oil for the Bushrod thermal plants.

But ESBI successfully negotiated with fuel suppliers and the Government to ensure a sufficient supply of oil for the dry season, thereby removing the need to have rolling power outages and providing full power to Liberia over the dry season.

Ashley said reorganization and restructuring of LEC is to transition the corporation into a modern, operational power utility, capable of serving the needs of its customers and becoming an engine of economic growth for Liberia.

“We engaged with the Donors, MCAL (Millennium Challenge Account-Liberia) and successfully negotiated a support package to LEC in the amount of US$1.5 million to procure much needed materials, tools and equipment to facilitate repair and maintenance of the network.”

Ashley further said LEC’s management engaged with the Donors, KfW (a German-owned Development Bank) and successfully negotiated a support package for the procurement of 5000 meters for installation and connection of customers.

“We are setting up new local LEC offices in both Grand Geddeh and Maryland to commence connecting customers and serve the needs of customers in those areas and have prepared a Turnaround Action Plan and a Business Plan for the corporation that will drive the recovery and development of the corporation over the next three years,” he said.

He said the management set up a high level Safety Committee in LEC to ensure that all managers and employees place safety at the very top of their priorities while at work.

At the end of the year, Ashley said the management will ensure the connection of 8000 new domestic customers, replace 3000 faulty meters; connect commercial and large industrial customers; ramp up the disconnection of illegal connections; work with the Ministry of Justice and the Liberian Police Force to effectively address the high levels of electricity crimes taking place.

”We will vigorously pursue power theft through the courts of law, reduce commercial losses; Manage the entire donor funded projects; Refurbishment of nine 1MW diesel power units in Bushrod Island to ensure sufficient generation for the 2018/2019 dry season,” he said.

He said LEC will procure and set up a modern communication system to facilitate the improvement of communication between customers and LEC.

The management also intends to closely monitor the construction program for the CLSG (Côte d’Ivoire, Liberia Sierra Leone and Guinea) transmission line and to intervene where required to ensure commissioning of the line in December 2019, in order to ensure sufficient availability of power during the 2019/2020 dry season.

According to Ashley, LEC also has on its agenda the human capacity development component, including: “Commence the selection of candidates for the pool of local transition managers that will replace ESBI towards the end of the Management Services Contract; Commence the management capacity building and training programs for the selected transition management team; Commence an extended training program for large numbers of LEC staff; Take part in the preparations for the VIA Dam hydroelectric power project,” he said.

He said the management will further implement the computerised Integrated Management System in LEC; Set up a new Gender and Social Inclusion Unit in LEC; and Improve LEC’s environmental performance across all activities.

LEC will also develop further customer connection projects in areas both within Monrovia and outside of Monrovia in order to increase the rate of customer connections.

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