BPE on Fixed Electricity Charge


Benjamin Dikki, director-general, Bureau for Public Enterprises, has hinted that fixed charge currently being paid by electricity consumers will go as soon as power generation increases to an economically sustainable level

By Anayo Ezugwu  |  Sep. 8, 2014 @ 01:00 GMT

THE Bureau of Public Enterprises, BPE, has said that the fixed charge currently being paid by electricity consumers in the country will be dispensed with as soon as power generation increases to an economically sustainable level. Benjamin Dikki, director-general, BPE, said   the fixed charge is a temporary measure.

The BPE boss said the country had an installed power generation capacity of 6,000 megawatts but was generating only about 3,000MW to 4,000MW. Dikki, in a statement made available by the BPE on Wednesday, August 20, said revenues from the 3,000MW were not sufficient to support the power infrastructure. “When power generation increases, the fixed charge will go.” He said the charge was the initial sacrifice consumers had to make given the huge financial investment made by the new investors who are yet to make adequate returns on their investments in the power sector.

On complaints of non-availability of electricity meters, the BPE boss said the government was addressing the issue, as the presidency had approved N33 billion low interest intervention fund to support the power distribution companies to buy meters and other accessories. He pointed out that Nigeria currently required three million meters yearly.

Dikki debunked claims of lack of transparency in the privatisation of the Kaduna Electricity Distribution Company, KEDC, and the picture created of a conflict between Geometrics Power Group and Interstate Electrics Limited, the core investor in the Enugu Distribution Company. On the KEDC, he said the reserved bidder could only be invited to step in if the preferred bidder failed to pay up the bid price.

According to him, the preferred bidder was within the time limit to pay the 75 percent balance of the bid price after the initial payment of 25 percent had been made. Dikki said it was wrong for anybody to call for the revocation of the sale as the process had to be completed before the reversion to the reserved bidder could be made.

On Geometrics, Dikki explained that it had a 20-year contract with the Enugu Distribution Company to supply power to the Aba and Ariaria districts, and which was not in contention. “Both parties are aware of this but it baffles me when people go out to deliberately distort the facts. We don’t understand the hue and cry that Geometrics are short-changed in the transaction,” he said. The BPE boss noted that the Bureau intended to focus on the transport sector in the next phase of the privatisation exercise as the sector was contributing about 30 per cent to the cost of doing business in the country.

Meanwhile, the National Council on Power, NACOP, has said that the Transmission Company of Nigeria, TCN, should be able to wheel at least 9,000 megawatts of electricity in 2014. The council, in a document containing its recommendations, said the TCN should have a short term target of wheeling 9,000MW and evacuating 6,500MW this year.

“The TCN should set up short-term targets to wheel 9,000MW and evacuate 6,500MW in 2014. It should set medium-term target for 12,000MW and 10,000MW respectively by 2016. TCN should liaise with the state ministry of power to secure right of way for transmission network. The Market Operator and System Operator should be made independent entities,” it said.

On funding for the transmission company, the council said not less than N160 billion should be mapped out for the TCN annually, with 75 percent of funds earmarked for capital expenditures. It said the firm must monitor at least 90 percent of the installed grid system, perform transmission network fault location determination within 30 minutes of occurrence, and comply with regulations on financial reporting.


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