Fashola Threatens GENCOs, DISCOs over Poor Performance

Fri, Apr 14, 2017 | By publisher


Power outage in the country persists despite the effort of the federal government to improve supply of electricity in Nigeria

By Anayo Ezugwu  |  Apr 24, 2017 @ 01:00 GMT  |

BABATUNDE Fashola, minister of power, works and housing, has charged all stakeholders in power sector to adhere strictly to all conditions in their contract with federal government or face dire consequences.

Fashola, in a communiqué issued at the end of the 14th monthly meeting of power stakeholders’ forum, in Osogbo, said all investors in the power sector were aware of opportunities and challenges before entering into agreement with federal government and investing in the sector, stressing that the present administration is prepared to implement to the letters, all conditions stipulated in the contracts, signed with it by investors in the sector.

On government’s part, he assured investors of the commitment of the federal government towards provision of conducive environment that will enhance their businesses. Fashola, who said efforts are on to facilitate more payment of debt owed power distributors by federal government, noted that operations in power sector is largely in the hands of private operators and must be made to fulfil their mandate to Nigerians.

The meeting which was attended by the leadership of the Nigerian Electricity Regulatory Commission, NERC, and the Transmission Company of Nigeria, TCN, representatives of the generation companies, Gencos and distribution companies, Discos, highlighted the issue of un-utilised load, and encouraged the industry to take necessary steps to address the problem.

In the communique, the managing director, TCN highlighted the issue of un-utilised load, currently causing high system frequency on the national grid, and encouraged the industry to take necessary steps to address the problem. TCN restated its commitment to expand transmission infrastructure and improve its operation and performance within the power sector value chain.

Also, the vice chairman, Nigerian Electricity Regulatory Commission affirmed the Federal Government’s expressed commitment to tariffs that ensure a self-sustaining power sector and to supporting NERC in applying sanctions where appropriate to ensure operators comply with the rules.

“NERC highlighted the recently reconstituted commission’s focus on fair but firm regulation in the following areas: enforcing Discos metering commitments, prepaid meters for MDAs, centralised management of market revenues collected from all customers, appropriate capitalisation of DisCos, and prudent procurement. “It urged electricity customers to play their role in the success of the industry, through the timely payment of bills, ending the vandalism of power assets, and the assault of electricity workers who seek to install or read meters.”

Meanwhile electricity generation has dropped consistently for two weeks, averaging 3,400MW despite the fact that the Niger Delta militants have ceased to attack gas pipelines in recent months.  Power generation had hit an all-time high of 5,074megawatts on February 2, 2016 before the Niger Delta Avengers, NDA, and other militant groups launched fresh attacks on oil and gas infrastructure in the Niger Delta, which disrupted gas supply to power generating plants.

According to the Transmission Company of Nigeria, TCN, from a one-month daily peak of 4,452 megawatts recorded on March 22, peak generation had dropped consistently to 4,072.70MW on March 29. The Daily Operational Report further showed that from the daily peak of 4,072.70MW on March 29, generation dropped consistently with daily peak dwindling to 3,737MW on April 5 and 3,903.30MW on April 8. Also the daily lowest generation, which was 3,638.60 megawatts on April 2, also dropped consistently to 3,200.20MW on April 5 and 3,289.40MW during the weekend.

With the poor generation in the past two weeks, electricity supply, which averaged 4,400MW four weeks ago, hovers around 3,400MW since the past two weeks, despite the relative calm in the Niger Delta. Realnews had reported that while the generation and distribution companies have blamed poor supply on gas shortages and grid instability caused by weak transmission infrastructure, the TCN blamed the Discos for rejecting power allocated to them.

However, gas suppliers have argued that there is enough gas to generate power but that the generation companies cannot pay for gas. But the Gencos have insisted that they are not able to pay for gas because they are being owed for the power they generated into the National Grid.

To address the liquidity challenges, the federal government had approved N701 billion intervention funds to assist the members of the electricity value chain to meet their obligations. But the electricity distribution companies under the aegis of the Association of Nigerian Electricity Distributors, ANED, argued that the N701 billion funds have the potential to worsen revenue shortfalls bedevilling the power sector.

—  Apr 24, 2017 @ 01:00 GMT