Vanguard (Lagos)

Nigeria: Consumers, Operators Disagree As Power Drops

Rising estimated billings, drop in power generation on account of gas shortages, funding and confusion over the Multi-Year Tariff Order, MYTO, measurement are among the legion of issues resulting in the near collapse of power supply in the country.

Electricity supply has dropped drastically in recent times, as new investors battle operational issues, thereby frustrating business and domestic activities.

As a result, consumers are resisting paying the estimated bills until they are assured of regular supply, while denying the new investors the funds they require to improve on their operations.

New operators of the erstwhile Power Holding Company of Nigeria, PHCN, generating and distribution companies, GENCOs and DISCOs, appear to be overwhelmed by these challenges since taking over on November 1.

Confusion galore

Giving more insight into the avalanche of challenges at the just concluded first general meeting organised by Nigerian Electricity Regulatory Commission, NERC, in Abuja, Mrs. Funke Osibodu, Director, Benin Electricity Distribution Company, described the situation as chaotic.

She said: "There is so much confusion in the public, and we need to look at how to address this.

"For instance, the public believes they are not supposed to pay anything until January; that they should not be disconnected until then; and they believe they can come and stand in front of you and collect pre-paid meters just like that."

But electricity consumers are impatient and want to see regular power rather than being bothered with the issues relating to power system operation from generation (GENCOs), transmission and distribution (DISCOs).

According to Osibodu, "anything that happens anywhere, even if it is not your concern, it is assumed that it is your doing.

"The public believes that the lack of power is because the new owners in distribution companies do not know what they are doing.

"But in reality, it is a GENCO problem as a result of gas shortage. At one point, we were about going on air to make people know the true position."

She said that the public was expecting too much too soon from the new operators.

Power generation

Also speaking, Dr. Jamili Gwamna, Managing Director/Chief Executive Officer, CEO, Kano DISCO, disclosed that there had been a drop in power generation.

He said the amount of power allocated to his company was far below its capacity without giving details, adding that the development had reduced the DISCO's revenue projections.

He lamented: "Our power allocation has been low in recent times. How on earth will customers pay me and how will I pay money also?

"There has not been power and when you threaten to disconnect consumers, they tell you to hurry up with the disconnection process."

MYTO measurement For Mr. Adeyemi Adenuga, Managing Director/Chief Executive Officer, CEO, Geregu Power Plc (GENCO), the challenge borders more on activities of the system operator.

He said: "The system operator that is supposed to know that capacity declaration is what they should use to measure capacity continues to use another thing outside what is in the Multi-Year-Tariff-Order 2, MYTO, agreement and outside the interim rules that have been provided.

"We are not happy and I think that the regulator, apart from coming up with all these beautiful rules, should make sure that the people who are there are actually keeping to these issues."

Sam Amadi, Chairman, NERC, said the meeting was organised to hear out the operators and their challenges.

He promised that all the issues raised would be addressed by NERC.

Funding challenges

Though the new investors did not talk about funding, it was learnt that huge investment would be needed to put the GENCOS and DISCOS on track to meet the aspirations of Nigerians.

According to the Bureau of Public Enterprises, BPE, the DISCOs alone would require about $1.8 billion (about N288 billion) as capital expenditure over the next five years to attain efficiency and meet the required capacity.

However, such capital outlay would be challenging, given the Central Bank of Nigeria, CBN's directive that banks should scale down funding in the power sector, while international lenders are said not to be favourably disposed to lending to Nigerians due to what they described as volatile polity.

But Bekuochi Nwawudu, Director, CBO Capital, an investment advisory and project development firm, who is also an energy expert, said that the power companies would get the money to fund their projects.

He argued that, "telecommunications companies found the money and expanded. Oil companies have borrowed significant amount.

"Power will be the same. The question is will people pay their bills and thus will revenues/profits be demonstrated?

"If this happens, pensions funds have capital and bonds can be issued-- the banks do not need to do it all."

Nwawudu said the privatisation of the power sector has thrown up opportunities in the economy.

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