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Economic Commentary  
 

The state controlled power utility, the Ethiopian Electric Power Corporation (EEPCo) has been under fire from the public for its failure to provide reliable and consistent power to its customers. The public is disarmed in the face of a crippling deficit crisis of electric power provision. This is partly because the public watchdog with oversight power over EEPCo has also been complacent, argues Yohannes Woldegebriel, director under the Arbitration Institute of the Addis Abeba Chamber of Commerce and Sectoral Association (AACCSA). Yohannes blames the media for its failures to take the Ethiopian Electric Agency (EEA) to task in challenging it to live up to its foundation objectives.

When Culprit, Judge are the Same, Power Corrupts

 

Ethiopia's rivers have great potential to generate hydro-electric power with an estimated capacity of over 30,000Mw. However, we have not been able to fully utilize our hydro power resources because of the huge amount of investment the sector requires..  Electric power has become a vital source of energy, for developing countries. Most activities in urban areas and particularly those using modern technologies are dependent on electrical power.
 

With the application of modern information and communications technologies in public and private life, the demand for uninterrupted supply and use of electricity has become decisive. Increasingly, it has become indispensable. Without alternative sources of energy such as solar or thermo power or diesel generators,  it has become challenging to conduct normal industrial and commercial activities run by public or private undertakings.
 

First established in 1942 and then incorporated by the imperial charter as a corporate body more than half a century ago, the Ethiopian Electric and Power Corporation (EEPCo), has been the only publicly owned supplier of electric power in the country. Since its establishment in 1956, the goal of the corporation has been to engage in the business of generating, transmitting, distributing and selling electrical energy to its customers in Ethiopia. It is therefore a business organization with the primary focus to attain its objective and generate a profit.
 

The last 15 years have witnessed an unprecedented increase in hydro power supplies. Various local and international financial institutions, as well as lending countries, have supported the construction of mega hydro-electric power generation projects. At the same time, a consummate rise and insatiable demand for electric power has occurred. Consequently, EEPCo is faced with serious predicaments of meeting the demand, to engage in business activities and generate profits, and as a publicly owned enterprise, comply with "the economic and social development policies and priorities of the government," as it is articulated in its establishment regulation. 
 

Obviously, the corporation is required to assume incompatible and, at times, contradictory responsibilities and attain conflicting aims., For example, EEPCo continues to conclude power supply contracts and enter into firm commitments to provide "regular power supply" while it is also attempting to implement primarily politically motivated policy directions of "reaching the un-reached," through its rural electrification or universal access to electricity programme which is not necessarily commercially viable.
 

Where the available power resource and reserve is limited or on decline, the commercial purpose of the corporation is bound to get compromised. Services are provided inefficiently at the expense of parties to  power supply contracts.

 

EEPCo's current quagmire in respect of power supply contracts can be explained in part by these factors. It is more clearly understandable if one can examine the statutory objective of the corporation under its establishment regulation.
 

Over the past few weeks, this newspaper has had extensive coverage of the power crisis-a burning issue during our time.  In a desperate attempt to inform the public of the root or temporary causes that resulted in the existing predicament and the promised well lit or bright future waiting Ethiopia as explained by the Corporation officials. No doubt, this newspaper exerted enormous time and energy to find out the real reasons behind the current power shedding that will frustratingly continue for the coming months until, as has been clarified time and again, the completion of newly constructed power generation facilities and the new or existing dams are full after the forthcoming but still uncertain rain water, to the satisfaction of EEPCo officials.
 

It has now become customary for managers at EEPCo to discuss the electric power interruption, shortage, shedding, unreliable supply, and deficit crisis in very conflicting and inconsistent conjectures. Among the numerous causes of the present problems, according to officials in EEPCo are: "imbalance in supply and demand," "unprecedented economic growth," "social development," "environmental situations," "population growth," and "evaporation."
 

These same managers of EEPCo unashamedly present the solution and pledge a rosy future akin to a dreamland. They urge customers to bear the cost and resume shouldering "temporary power sufferings."
 

The major culprits responsible for most of today's power crisis are offered, through the public and private media, ample opportunity to feed customers with all kinds of unpalatable excuses for inefficient, under-managed and poor planning of power and electric services. It is unfortunate that no one bothered to approach and confront yet another lethargic and voiceless public agency mandated to regulate EEPCo and other future electric power generation, transmission, distribution and sale enterprises.
 

The Ethiopian Electric Agency (EEA) was established under proclamation issued in 1997; it is - supposedly - empowered to regulate and ensure "the activities of electricity suppliers . . . for the supply of efficient, reliable, high quality and economical electricity services."
 

This agency is also legally mandated to supervise, among others, the supply of electricity to customers on regular basis and even revoke the license it issued to  private or public enterprises, including EEPCo, where there is "repeated interruption, reduction or termination of electricity supply in the absence of force majeure." Despite the vast coverage of news stories, features, interviews, and articles in the print and electronic media, I have not come across a tinsel of information tendered or provided by the agency.
 

No one dared to ask what the agency is doing with respect to enforcing its legislative power nor solicited its opinion whether the existing power interruption is due to "force majeure"; if not, what measure has is taken to remedy the violation.
 

If the agency shares the rhetoric and conjectures on the causes, effects and solutions tendered by EEPCo officials, it appears that the agency has so far been utterly complacent to the ordeals of unwarranted power interruptions. It seems to have slept unaffected to the public outcry, leaving power customers to arbitrary and wanton disregard. No one knows when this agency shall wake up from its deep slumber and assert its very existence to account for the wasteful use of taxpayers' money.
 

The agency, as a regulatory body protecting the public, is supposed to impose a reserve of electric power supplies of 20pc, issue guidelines and directives to determine the amount of compensation for customers for un-served power and unjustified power supply failure, decide the existence of force majeure during power interruptions and carry out a host of other activities to protect and safeguard customers. This agency was expected to thwart any plan and voice against misguided action that impose the universal access to electricity at the expense of inefficiently served power customers.
 

The agency should have taken the initiative to explain to the public the actual, authoritative and legitimate causes for power interruptions, rather than forgo this responsibility to inconsistent, conflicting and unacceptable public information provided by persons not so mandated by law or by the agency.
 

I have no knowledge of the agency's attempt to investigate and put the record straight when confusing information shrouded with lies was provided last year to the public. After a substantial and more than average rainfall available, managers of EEPCo blamed lack of adequate rainfall and subsequently attributed an increase in demand for more power supply due to the double digit economic growth of the country.
 

EEPCo was not established to be a charitable organization or provide social equity services by fairly distributing power supplies to all in need. EEPCo should have to serve and satisfy its long time and corporate customers before considering entering in to other contracts of power supplies. In fact, the dictates of government priorities may not necessarily tally with its business objectives. However, it would have to know that contracts entered earlier should be properly observed before entering into other contracts. EEPCo's customers ought not to shoulder the inefficiency of poor power management.
 

Despite the Corporation's behavior, an active regulatory body could have done a good job as public watchdog to enforce discipline and good business conduct. Unfortunately, both the power monopoly corporation and the regulatory body happen to belong to one and the same ownership. It is highly improbable for customers to get fairness and justice when the culprit and the judge are the same.

It seems, therefore, customers will continue to suffer until this scenario is changed for good or the rule of law is upheld.

 
 
 
 
 
   
   
   
 
 
 

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