Power logjam

•The present system has failed; there is need for a better arrangement

THE anticipated enhanced generation, transmission and distribution of electricity in Nigeria following the far-reaching restructuring of the country’s power sector in November 2013 remains a mirage. Despite the unbundling of the defunct power behemoth, the Power Holding Company of Nigeria (PHCN), into six privately owned power generating companies (GenCos) and 11 distribution companies (DisCos), power supply in the country continues to be abysmally low, hardly exceeding 5,000 Megawatts on rare occasions, although the installed generating capacity is put at 12, 910.40 Mw.

Consequently, there has been hardly any noticeable sustained improvement in the country’s electricity supply situation almost six years after the privatisation and the economy continues to suffer badly. Business and manufacturing costs are increased due to reliance on generators with negative consequences for efficiency, competitiveness and profitability. There is in addition the drain on scarce foreign exchange as a result of massive importation of generators and the loss of jobs as businesses are inclined to migrate to more clement environments.

Millions of private homes also rely on generators, causing not just distracting noise pollution but with generator fumes posing health hazards to communities. It was thus not surprising that an exasperated works, power and housing minister, Mr. Babatunde Raji Fashola (SAN), last July at a press conference in Abuja called on the DisCos specifically to either sit up and meet their contractual obligations to consumers or step aside and allow new investors with the capacity to optimise power produced by the GenCos. He was riled by public complaints as regards unavailability of meters, exploitative estimated billings and alleged mass disconnections.

At the end of a retreat in Owerri, the Imo State capital, top officials of the Federal Ministry of Works, Power and Housing restated the minister’s position when they called, in their communiqué, on the Nigeria Electricity Regulatory Commission (NERC) to review the relevant legal procedures and stipulations to enable new investors participate in the generation and distribution of electricity in the country. This, they argued, would enhance competitiveness and efficiency in Nigeria’s Electricity Supply Industry (NESI).

It is obvious that beneficiaries of the earlier PHCN privatisation either enjoyed advantage from a process that compromised capacity and competence or genuinely underestimated the challenges facing the country’s power sector. The result is the utter logjam in the power sector with various actors in its critical subsectors trading blames while Nigerians suffer. Allowing new investors to bring in fresh funds and professional capacity will, for instance, enable consumers to readily switch between service providers, thus stimulating competition and possibly better service delivery.

But we are surprised that officials of the ministry were silent on the Transmission Company of Nigeria (TCN), which is wholly owned by the government and is also part and parcel of the problems. For instance, it is reported that the country’s power grid being managed by the TCN has suffered five collapses this year alone, with the transmission company’s capacity utilisation dropping to 14.8%. The TCN blames this on inadequate investment in electricity distribution network by the DisCos but the latter claim that TCN is hobbled by lack of new generating plants as well as gas, water and grid constraints. TCN workers at its substation at Odongunyan in Ikorodu, Lagos State, for instance, also complain of staff shortage, inadequate operational vehicles and security concerns.

Enhancing greater competitiveness in power generation and distribution, while allowing transmission to remain a centralised government monopoly, will not fundamentally solve any problem. From all indications there is need for an urgent stakeholders’ summit to rethink, remodel and resolve Nigera’s power supply logjam.