Patrick Ugeh and Chika Amanze-Nwachuku in Lagos
6 March 2009
Abuja — In its avowed drive to clear the Aegean stable and work towards the attainment of 6,000 mw of electricity by December this year, more top officials in the power sector have been shown the way out.
The top echelon of the Transmission Company of Nigeria (TCN), one of the sister companies of Power Holding Company of Nigeria (PHCN), was yesterday replaced with a new crop of officers.
A statement last night by Mr. O.A Olusoga of the Human Resources Department of PHCN named Mr. Isa Musa as the new Chief Executive Officer (CEO) of TCN, while U.D. Achinanye is the new Executive Director, Marketing Operations.
Others appointed are Bada Wile, Executive Director, System Operation; O.O Akiniranye, Executive Director, Transmission Service Provider; and G.A Okotoro, Executive Director, Finance and Accounts.
Only last Tuesday, the Executive Vice-Chairman/CEO of PHCN, Alhaji Bello Suleiman, was sacked by the Minister of Power, Dr. Lanre Babalola, though Suleiman claimed he resigned his position.
Meanwhile, Babalola has disclosed that Nigeria loses about 30 per cent of its electricity generation to technical problems due to the use of inappropriate and obsolete equipment.
Making the disclosure during an interactive forum with newsmen yesterday, the minister said Nigeria has the capacity to generate over 4,000mw of electricity but could only generate about 3,000mw owing to problems ranging from shortage of gas supply, obsolete equipment to inadequate transmission infrastructure.
Pointing out that the greatest challenge confronting the power sector was shortage of gas, Babalola said about 1bcf/d was required to generate the 6,000m but that currently only about 400,000tcf/d is available.
He, however, assured Nigerians that the 6,000mw target was attainable as government had provided the funds needed to address the problems; even as he disclosed that about N430 billion had been set aside for the power sector this year.
According to him, N90 billion came from the 2009 budget, which was for capital and recurrent expenditure, N300 billion for the National Integrated Power Project (NIPP) and N40 billion as the special intervention fund.
The minister said: "For the 6,000mw target that we have for the end of the year, it should be achieved through the rehabilitation of the existing power generation assets and through the completion of one or two National Integrated Power Projects (NIPP) project.
"Currently, we have over 4,000mw capacity available, which can actually run. Unfortunately due to gas shortage, we can only run about 3,000mw. The rehabilitation programme is expected to give us close to 1,000mw, when added to the existing capacity, we would have about 5,000mw. With what the IPP currently generates, we have over 5,000mw and by the end of the year; we will have well over 6,000mw.
"The biggest challenge we have is gas supply. The power sector requires one billion cubic feet of gas per day (bcf/d) to run all the thermal plants and currently gets less than half. That is one of the major limitations we have.
"The other problem is the transmission system. It is outrageous and cannot support 5000mw. The other initiative apart from generation rehabilitation is to address transmission infrastructure. We need to install more transformers and look at a lot of equipment in the distribution section. A substantial number of transformers are overloaded, and some obsolete ones need to be changed.
Also yesterday, Babalola rolled out guidelines aimed at efficient and transparent application of the N177 billion provided by the Federal Government to subsidise the difference between the new electricity rate of N11.20 per unit and the current N6.00 being paid by consumers.
The Multi-Year Tariff Order (MYTO), a new tariff regime for the electricity industry in Nigeria, was approved for implementation by the Federal Government from 1st July, 2008.
A statement issued by the Chief Press Secretary to the Minister of Power, Mrs. Olubunmi Badejo, said: "In order to ensure efficient and effective utilization of the MYTO subsidy, the Minister of Power has approved the following:
(i)The MYTO subsidy shall be domiciled with the Central Bank of Nigeria (CBN) under the custody of the Federal Ministry of Power;
(ii) On a monthly basis, the Market Operator (MO), under the aegis of The Transmission Company of Nigeria (TCN) shall calculate subsidy requirements of each of the 11 Distribution Companies in line with the energy delivered and collection efficiency and submit same to the Federal Ministry of Power for approval;
(iii) The Federal Ministry of Power shall forward the request to NERC for vetting, verification and further advice.Thereafter, she said, the Minister of Power would approve the appropriate subsidy and request the CBN to release the approved subsidy into the "Market Settlement Account", being operated by the Market Operator.
According to the statement, "The MO shall utilize the internally generated revenue and the released subsidy to settle all the identified in paragraph 2 above.
"The generation companies, both government-owned and IPPs, who are to sign agreements for gas supply directly shall mandatorily pay Nigerian Gas Company (NGC) and gas producers for gas delivery and supply; and on a monthly basis, after settlements, the MO shall submit all returns of disbursements to the Minister of Power."
Badejo expressed the hope that the above arrangement would ensure "unbiased and transparent" administration of the subsidy and shall further strengthen the operations of the distribution and generation companies, particularly the IPPs.
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With the guidelines provided by this ministry, it is clear where the power sector is heading for. Clear guidelines should be the order of the day in all ministries, the presidency and with the lawmakers. YOU REAP WHAT YOU SOW!