The Nation Newspaper

Tag: DISCOS

  • House to probe meter scarcity, says lawmaker

    House to probe meter scarcity, says lawmaker

    The power distribution companies (DISCOs), the Ministry of Power, the Nigerian Electricity Regulatory Commission (NERC), and other stakeholders may appear before the House of Representatives Committee on power over the scarcity of prepaid metres, a member, Hon Abike Dabiri-Erewa, has said.

    Speaking during a tour of Momas Meter Manufacturing Company Limited (MOMCOL) in Mowe, Ogun State, Mrs Dabiri-Erewa said the probe was necessary to get to the root of the problem.

    She said the Committee would probe metres’ scarcity, low patronage suffered by indigenous manufacturers, and local content, adding that manufacturers have suffered despite the huge market.

    The lawmaker said: “We are going to invite all parties involved, be it DISCOs owners, NERC, Ministry of Power and all stakeholders to know why local manufacturers are not been patronised.

    “Nigerians deserve better electricity services and we are going to get to the root of the challenge in the sector. There is need for us to give deadline to all DISCOs on installation of pre-paid metre to all electricity customers, but we equally gathered that most new owners face the challenge of finance.”

    Mrs Dabiri-Erewa said the House would have given deadline to all DISCOs on installations of pre-paid metres, if not because of the financial challenges facing them.

    She urged investors in the power sector to step up efforts aimed at improving electricity generation, transmission and distribution in the country.

    She said DISCOs must ensure that customers are metered to prevent estimated billings, and other problems faced by the consumers.

    She urged power firms to improve electricity generation, distribution, and transmission in the country

    Mrs Abike-Dabiri said metres had become difficult to come by in many homes, advising the firms to make the product available in the country.

    ‘’We should learn how to believe and celebrate ourselves. We should be determined to develop. As a parliamentarian, I am going to discuss with my chairman on power on ways to enforce local content through patronage of local metre manufacturers,” she said.

    She said the House would ensure that local content is embedded in power sector, as done in the oil and gas sector.

    MOMCOL’s Chairman Mr Kola Balogun decried poor patronage of metres by companies and government agencies in the country.

    He said Nigeria does not need to import metres, given the potential available in the country.

    “Indigenous (metres) manufacturers do not get enough patronage from government ministries and that is why our economy is not growing. The story of poor patronage is still the same in metres manufacturing sub-sector where foreign firms are patronised by government agencies. I can confidently say that local manufacturers can meet our needs. Nigeria has reached a stage where she is not supposed to be importing metres. In our company alone, we have a production capacity of 500,000 to one million meters a month,’’ he said.

    Balogun said manufacturers are facing funding as they find it difficult to access credit facilities from banks. He said the Small and Medium Scale Entrepreneurs (SMEs) needed to be encouraged to produce metres’ spare parts to grow the economy.

  • NERC, BPE to monitor DISCOs, GENCOS

    NERC, BPE to monitor DISCOs, GENCOS

    The Nigerian Electricity Regulatory Commission (NERC) and the Bureau of Public Enterprises (BPE) are contemplating an inter-agency committee to monitor the 15 power firms.

    BPE’s spokesman Joe Anichebe told The Nation that the committee would monitor the activities of the firms since they took over the Power Holding Company of Nigeria (PHCN) assets last year to ascertain whether they have complied with the post-privatisation and regulatory laws.

    He said the committee would look at whether the companies have achieved some of their objectives or not, and their ability to meet the goals enshrined in the reforms act.

    The modalities for assessing the operators, he said, would be provided by the Committee.

    Anichebe BPE and NERC perform different functions, hence the need for them to jointly monitor the firms’activities from their perspectives.

    He said: ‘’There would be an inter-governmental agency committee to work out modalities on how to monitor the activities of the newly approved players in the power sector. The committee would be saddled with the responsibility of providing accurate and objective observation of the events in the sector to foster growth.”

    Anichebe explained that while the BPE would look at the post-acquisition plans of the companies and the Share Purchase Agreement (SPA), the NERC would look at the technical and regulatory obligations the companies are expected to meet to achieve their goals of improving electricity supply.

    ‘’ Under the post-acquisition plans, the firms told us the things they want to do; they told us what they intend to achieve within a particular period of time. Through the exercise, we would find out whether the companies have accomplished some of their set goals or not.’’

    Also, the NERC’s Chairman, Sam Amadi said the commission would ensure that the firms comply with the best practices of corporate governance. Amadi, who gave the assurance in a telephone interview with The Nation, said no stone would be left unturned in making the companies operate in line with the established frameworks. He said there would be checks and balances, adding that the firms must obey the laid down rules to ensures success of the reforms.

    NERC, in line with the Electric Power Sector Reform Act (EPSRAct 2005) is expected to formulate and implement policies that would protect the interest of consumers. It will also set and review tarrifs, issue licensces to operators, and where possible promotes competition.

  • DISCOS eye independent power generators

    DISCOS eye independent power generators

    As power generation level continues to decline as a result of gas pipeline vandalism, electricity distribution companies (DISCOs) are looking beyond the national grid and discussing with private power generating firms.

    Eko Electricity Distribution Company (EKEDC) is one of such DISCOs. Its Chief Executive Officer, Oladele Amoda, told The Nation that exploring such option had become imperative as the upstream segment has a problem and has failed the nation.

    He said: “We are exploring new ways of bringing power to our network outside the grid. We are going into embedded generation to complement whatever we are going to get from the grid. The grid is having some challenges now, but we want to overcome the challenges in the shortest possible time.”

    He explained that embedded generation is another viable option because it is got outside the national grid. According to him, this type of generation is achieved through a bilateral agreement between the generating firms and the DISCO.

    He said embedded generation is done in small forms but the generated power is given to DISCO directly.

    “The power generation we have is generated into the grid and from the grid it is allocated to DISCOs, but the embedded generation is direct arrangement between the company that is offering the embedded power and the DISCO.

    “It is a direct agreement. The company will set up their plants, we discuss on the terms, which include tariff and others. We will take power directly from them,” he said.

    Amoda, however, said embedded generation is just complementary power that is off-grid. “We have control over that and it will be more stable than the one from the grid. “Grid power is subjected to system collapse and other issues but embedded power wherever we channel it to, the customers there will have stable power supply,” he added.

    He said the firm wants to expand the network because what it inherited is such that it cannot carry the load that the management expects in the near future.

    “So we have a plan to reinforce the lines, change all the obsolete equipment to improve supply,” he added.

    He also said as part of strengthening the network of the firm and human capacity development as well as customer care, the management is investing in all the value chain of the operation. He added that the company has a training programme that is structured and tailored to suit all its activities. “Very soon, we will get some National Power Training Institute of Nigeria (NAPTIN) trained engineers to complement what we have,” he assured.

  • Ecobank eyes $5b yearly power sector financing

    Ecobank eyes $5b yearly power sector financing

    Ecobank Nigeria has projected power sector funding of at least $5 billion annually over the next five years.

    In a statement made available to The Nation, the lender said the investment is in line with its policy to support the development of the power sector in Nigeria. It said the fund is part of its contribution to the sector’s transformation, initiated by the Federal Government through its privatisation programme.

    The lender said it has played a major role on the buy-side of the power sector privatisation exercise by providing financial advisory services, lead arranger role, acquisitioning financing and guarantees to distribution companies (DISCOs) , generating companies (GENCOS) and National Integrated Power Plants (NIPPs).

    Ecobank Country Head, Power & Energy, Olufunke Jones said the bank’s objective is focused on playing actively at all levels of the sector’s privatisation, which includes generation, transmission and distribution.

    She said:”Nigeria has one of the largest gaps between demand and supply for electricity. To bridge this gap the country requires a combination of favorable government policies, private sector participation and foreign direct investment (FDI) as well as transparency and persistent monitoring that will guarantee an improved business environment.”

    According to her, the current power reforms have created opportunities for capital expenditure (CAPEX) and operating expenditure (OPEX) funding, which is a consequence of the handover to the new owners. She said:“There is the urgent need to rehabilitate the distribution networks in order to make them robust and flexible enough to accommodate the nation’s demand for power.”

    Also commenting, Local Account Manager, Corporate Banking Group, Mrs. Funmilola Ogunmekan said unlike the telecoms industry where new investors were able to take advantage of new technologies to redefine industry norms, the power sector is faced with the challenges of upgrading mostly obsolete equipment and processing under a traditional technology framework. This, amongst others, are the immediate challenges that should be addressed before the potentials of the industry are fully manifested.

    Ogunmekan reiterated that this year, the lender will leverage its position as a bank with the third largest branch network to provide effective utility collections and cash management services while providing the required additional CAPEX/OPEX funding for at least five of the distribution companies across the country.

  • DISCOs blame TCN for poor power delivery

    DISCOs blame TCN for poor power delivery

    Some top management staff of the Electricity Distribution Companies (DISCOs) over the weekend blamed the ongoing nationwide epileptic power supply on the inability of the Transmission Company of Nigeria (TCN) to meet energy demands.

    The officials, who pleaded anonymity, gave the blame in an interview with the News Agency of Nigeria (NAN) in Lagos.

    According to them, most DISCOs have been trapped in poor service delivery by the TCN which has significantly reduced power supply to consumers.

    They alleged that the situation had drastically reduced the revenue base of the DISCOs as well as sabotaging their supply capacities to end users.

    They blamed the development on “poor fault clearance by the transmission company, owing to poor financing and bureaucracy in maintaining some of the equipment.

    “The epileptic power situation has denied most distribution companies huge revenue because it ‘could not claim money for services not delivered to the consumers,” they alleged.

    They said that poor energy supply had made it extremely difficult for the DISCOs to distribute bills and collect money from customers.

    “This situation is very unpleasant for the good image of the DISCOs because most consumers do not know the supply value chain.

    “So, they believe we are not efficient, which is a wrong perception,” they said.

    An official of the TCN who declined to comment, however, said that there were serious faults on the company’s plants.

    He said that the TCN was collaborating with DISCOs to meet the demands of the public.

     

  • Stable power: Why June deadline is not feasible, by DISCOs

    Stable power: Why June deadline is not feasible, by DISCOs

    Can the new power firms meet the Federal Government’s deadline to ensure stable electricity by June? They cannot, say some stakeholders in the industry, who spoke with The Nation.

    President, Nigerian Liquefied Natural Gas Association, Mr. Dayo Adeshina, said the deadline was not realisable because of the recurring gas problems in the country. He said the inability to get enough gas to fire the turbines was affecting electricity generation and distribution.

    He said there was no end in sight to power outage because of the infrastructural decay, adding that it would be difficult to meet the electricity need of Nigerians, with power generation fluctuating between 3,000 megawatt (MW) and 6,000MW in the past two years.

    Adeshina said: “Meeting the June deadline for provision of stable power is practically impossible because the gas needed to feed the power plants is not available. A lot of plants are idle because there is not enough gas. The firms cannot produce at optimal capacity because they cannot get gas, a feedstock required in the industry.”

    According to him, failure to construct enough gas pipelines has prevented the firms from improving power. “Low investment in gas pipelines and vandalism have affected the firms’ capacity to increase power output and meet the need of the population. To improve power supply, the government should provide more pipelines in the next five years. Distribution companies need to invest in infrastructure to help in improving power supply,” he added.

    An official of Sahara Energy Resource, Neye Shonubi, said the Nigerian Electricity Regulatory Commission (NERC) was in the best position to speak on the issue. Shonubi, whose company owns Egbin Power Station and Ikeja Electricity Distribution Company, said the Commission knows whether the companies can provide stable power or not.

    The President, National Union of Electricity Employees (NUEE), Mansur Musa, said it was not possible for the firms to meet the deadline going because of the infrastructural decay in the sector. He said the deadline was a facade to cover up some issues.

    He said: “The water level in the dams rises in June and July every year. When this happens, there would be enough water for use by the hydro stations. If the thermal plants were able to access gas for operations during that period, the development would lead to an appreciable power supply and Nigerians would have no choice than to believe that the power is stable. However, there is a problem. Immediately the water level drops between August and December, the country would relapse into darkness and the reality would dawn on people that the country‘s power is yet to improve.”

    Musa urged the government to invest in infrastructure to grow the sector, adding that the firms do not have enough money for operation. The companies, he said, borrowed money from local and foreign banks to acquire the assets of the Power Holding Company of Nigeria (PHCN) and need to pay back at an agreed rate and period.

    ‘’That is why investment in infrastructure should not be seen as the major responsibility of the power firms. The government should come to their aid if meaningful growth would be recorded in electricity generation and distribution. For Nigeria to enjoy stable power in the next three or five years, the government should assist in providing infrastructure as recorded in its agreement with the companies on the issue,’’ he said.

    A worker of Eko Electricity Distribution Company, who pleaded not be named said stable power supply was far-fetched, because Nigeria relies on gas-powered plants.

    “Many of the plants are thermal, only Shiroro, Kainji and Afam are hydro- powered stations. With the stations experiencing a drop in water level, and the thermal plants battling shortage of gas, it is difficult to guarantee stable power in Nigeria,” he added.

  • Power firms pay N14billion

    ELEVEN power firms paid about N14billion to government’s coffers as electricity market fund as at November, The Nation has learnt

    An operator in the Nigerian Electricity Market (ONEM), who spoke on condition of anonymity, said the money was paid by the power distribution companies (DISCOs).

    “That was the amount paid by the firm for November. For now, the amount was fixed. It could be increased by tomorrow, based on the market trends and what the regulatory body decides upon,” he said.

    Also, the Head, Power Contract and Power Procurement, Nigerian Bulk Electricity Trading Company Plc, Yesufu Alonge, said the firms, on the average, paid N12billion for November, adding, however, that the firms did not pay a flat rate.

    He said: “ONEM are in the best position to say how much the companies have paid. I think ONEM have the facts and figures on the transactions and performance of the interim market. Whatever they said should be accepted as accurate. They know what each firm has paid and the outstanding.”

    Chairman, Presidential Task Force on Power, Reynolds Beks Dagogo Jack, said a pre-Transitional Electricity Market (TEM) has been put in place for market growth, adding that the pre-Transitional Electricity Market shall be the subsisting order until next years when the Transnational Market will kick off.

    He said the market would be a platform through which the quantity of electricity sold would be measured, adding that the development would help in improving the industry’ growth.

    He said the government had introduced measures to make the power sector reforms to improve electricity supply and the economy.

  • NERC moves to clip GENCOs,’ DISCOs’ wings

    NERC moves to clip GENCOs,’ DISCOs’ wings

    TO ensure that the 14 power generation and distribution companies do not derail, the National Electricity Regulatory Commission (NERC) will soon release the guidelines for their operations

    The guidelines will regulate the safety, health and environmental operations of the GENCOs and DISCOs, NERC Chairman Dr. Sam Amadi said.

    Amadi told The Nation that NERC’s action was to prevent the firms from siting plants indiscriminately and posing security risks to the society, under the pretext of overcoming infrastructural problems. The commission, he said, would ban any of the firms without adequate safety and health standards from operating outside their domain when the guidelines are out.

    He said the commission was fine-tuning the guidelines to ensure that the firms carried out their operational obligations without problems.

    NERC, he said, had subjected the draft to public scrutiny to get more input. The guidelines will encourage safety of people during the installation, maintenance or operations of equipment by the firms.

    Amadi said: ‘’ In anticipation of the entry of private sector participants in the electric power sector, the Nigeria Electricity Regulatory Commission (NERC) is in the process of perfecting guidelines that will ensure that operators do not breach their licence obligations, and at the same time are able to temporarily operate out of compliance, where the urgent need arises.’’

    He defined the right to allow the firms operate outside their boundaries as “derogation,’’ adding that the idea is tied to certain safety and health conditions which the companies are obliged to meet.

    “Operators would be made to apply to NERC seeking for time to comply with codes and standards, and then submit detailed plans and timelines for eventual compliance,” he said, adding that the commission will consider the applications, and if found not to impinge on health and safety issues, and are justifiable, derogation may be granted.

    “We have our expectations from the companies and we would try not to compromise the safety of the operational environment of the operators,’’ he added.

    Amadi attributed the development to the weak state of the industry inherited by the new operators, noting that the sector is yet to rid itself of obsolete equipment, a development, he argued, that has made it difficult for the firms to operate and comply with the standards set by NERC on generation, transmission, distribution and customer welfare.

    According to him, issues such as distribution networks and customer care are vital to the industry’s growth. He noted that the companies are required to do something along that line. He said the DISCOs were obliged to take care of their customers by opening as many care centres as possible.

    Chief Executive Officer, Septa Energy Nigeria Limited Philip Iheancho said the industry is battling with infrastructural problems, adding that the GENCOs’ failure to access gas, among other materials, may force them to open plants outside their base without considering the implications.

    Environmental safety, he said, should be given priority when establishing plants in the power sector.

    President, Senior Staff Association of Power Holding Company of Nigeria (PHCN) Godwin Ifenacho said the planned privatisation of the National Independent Power Plant (NIPP) projects would succeed if investors were sure of getting production materials. There would be a challenge when the power plants find it difficult to access materials, Iheancho said.

    ‘’For instance, the distance between Omotoso and Papalanto power plants and Escravos Gas Project in Delta State is long, making it difficult for the plants to access gas for production. Based on this, the operators may be compelled to site gas plants outside their areas of operations, not minding the implications to the health of the environment,’’ he said.

  • Electricity: firms promise better days

    Electricity: firms promise better days

    The days when government agencies, ministries, parastatals and other power consumers, such as the police and the armed forces, owed electricity bills will soon be gone.

    The electricity distribution companies (DISCOs) have said that their priority on taking over the firms is to ensure that the outfits pay their electricity bills.

    They also pledged to capture customers within the value chain, solve metering problems, provide parameters for paying bills and introduce a flexible payment structure.

    According to Daniel Muller, Michael Tarney and Uade Ahimie who spoke in separate interviews in Lagos, meeting the targets is imperative to the growth of the sector.

    Muller, a transaction adviser of West Power & Gas Limited (owner of Eko Electricity Distribution Company), said the firm would make meters available to consumers under its jurisdiction when it starts operation. He said many customers did not have meters, making them to pay in excess of what they consume.

    Muller said: ‘’Half of our customers do not have meters. One of our goals is to provide meters to consumers. This would be done in an organised manner to prevent confusion. We are going to employ neighbourhood approach of distributing meters. By this, we would move from one neighbour to another to ensure that everybody is covered.’’

    He promised efficient distribution of electricity to consumers, adding that it is the core function of every distribution company. He said the firm did not have control over electricity generation, and would do its best to meet the yearnings of consumers.

    Ahmie, a Business Process Re-engineering Manager, NEDC/KEPCO, owner of Ikeja Electricity Distribution Company, said overcoming the problem of lack of meters was one of the goals of the company.

    Ahmie said Ikeja consumes a huge volume of electricity because of its commercial nature and it must have regular electricity supply to boost the economy.

    ‘’Managing the collection of bill is another area we are looking at. Under the Power Holding Company of Nigeria (PHCN), it was a problem collecting and managing bills. To avoid past mistakes, we intend to provide highly innovative and corrupt-free method of collecting bills. We are going to look at customers’ metrics to ensure that they are captured in the value chain,” he added.

    He said consumers would be educated on how energy is distributed and regulated within the houses and offices to reduce consumption and the importance of paying bills to the right people.

    According to him, Ikeja and Eko Electricity Distribution Companies would reduce their cash collection centres and advise customers on how to use payment channels, such as the Automated Teller Machines (ATMs) and Over-the-Counter (OTC) payment among others.

    Tarney, a director at KANN Utilities, the firm in charge of Abuja, Nasarawa and its environs, said government had defaulted in paying for utilities. He said government institutions consume more electricity and were required to pay higher bils.

    He said: “As distribution companies (DISCOs) are starting operations soon, they would like to generate enough tarrifs to meet up their needs. DISCOs know that they can generate enough money from the government. They would like to rewrite history by making government to pay for utilities. Government agencies have a penchant for not paying their bills as at when due. They are adequately paid as evident by their budgetary allocations. If the government does not pay for the electricity it consumes, there is a problem. Everybody must be made to pay for energy. The issue of government institutions not paying their bills as at when due would no longer be tolerated.’’

    According to him, the objectives of the power sector reforms would be defeated if electricity distribution is not improved. He said the firms were would provide facilities to ensure even distribution of electricity and make consumers get value for their money.

    ‘’One thing that the 10 DISCOs have agreed to do is provide customers’ satisfaction. Once the power generation companies are able to add to the electricity megawatts (Mw), the distribution firms are obliged to supply power effectively to the customers. We believe that is the only way of gaining the confidence of the customers and further make them to pay their bills,’’ he added.

  • Workers’ protest may stall PHCN handover to GENCOs, DISCOs

    Workers’ protest may stall PHCN handover to GENCOs, DISCOs

    Despite making all payments, the 13 generation and distribution companies(GENCOs and DISCOs) may still have a hurdle to clear before taking over the assets of the Power Holding Company of Nigeria(PHCN).

    The workers are threatening to stop the takeover until the Federal Government implements its agreements with them before PHCN’s privitisation began a few years ago. The agreement included the payment of their severance package and re-employment by the new operators, among others.

    Earlier, the workers protested the handing over of the Transmission Company of Nigeria (TCN) in Abuja to Manitoba Hydro International, a Canadian firm.

    The Chairman, National Union of Electricity Workers, Lagos Chapter, Mr Adeleke Ibrahim, said workers had not receive their severance package because of the Federal Ministry of Power’s inability to put its record straight.

    He urged the committee and government agencies charged with computing the allowance to speed up and ensure that it is paid in time. The payment, he said, would placate the workers and avert problems in the future.

    The union, he said, would resist any further delay in payment because the workers had waited long enough for it and were now worried.

    The Chairman, Nigerian Electricity Regulatory Commission, Dr Sam Amadi, believes the workers’ action cannot scuttle the reforms in the sector. The workers had no power stopping Nigerians from benefitting from the reforms.

    He said the 13 GENCOs and DISCOs had met the requirements for operating as private entities, adding that the threat cannot stop them from starting operations.

    The workers, Amadi said, had not been justifying their earnings because they could not provide light for the country.

    He said it was time the workers left the sector for private companies to improve electricity supply in Nigeria.

    Amadi said: “The workers have been collecting salaries for years, yet they could not guarantee power supply. The government has paid N400billion as severance package, in addition to 50 per cent increase in their salaries. In spite of this, they are unable to justify the payment. Do we have light in the country? No. They have no choice than to leave for the new operators to come in to improve power supply.

    “I believe in the workers’ welfare, but I do not support any strategy that would destroy the successes recorded in the power reforms. The workers should go because issues relating to their outstandings have been sorted out. They cannot stop the private-sector- led initiative introduced to enhance productivity in the power sector.”

    The spokesperson in the Ministry of Power, Mr Timothy Oyedeji urged the workers not to lose sleep over the matter since the government has agreed to pay, adding that there are laid down structures for the payment.

    He urged the workers to refrain from doing anything that could affect the privatisation process.

    The workers’ actions, he said, would not prevent the companies from starting their operations, adding that some people were against privatising the sector.

    He said laid down procedures were followed to drive privitisation, urging workers to show enough understanding for the growth of the power sector.

    The former President, Senior Staff Association of the defunct National Electric Power Authority, Mr Godwin Ifenacho, said the protest followed the uncertainty surrounding the fate of the workers. He said the workers were provoked by the slow pace of payment, adding that only 40 per cent of the workers have received their emoluments.

    He said workers in Abuja among other cities had been paid, while others have not.

    He said: “The problems lie in the ways in which the workers are paid their emoluments. A situation where some workers have been paid, while others have not, is not good enough. This has created room for suspicion and fear. Based on this, the workers have no choice than to threaten to sabotage the efforts of the government.”

    The workers, he said, did not want what happened to the workers of the moribound Nigerian Airways and the Nigerian Telecommunication Limited(NITEL) to happen to them. After the liquidation of the Nigerian Airways and NITEL, the government failed to fulfill its promises of re-absorbing the workers”.

    “Workers are afraid of being thrown into the labour market. Their argument is that when the companies eventually take over the assets of PHCN, they would not employ them. To avert this, they want to stop the companies from starting operations,” he said.

    He urged the government to fast-track payment to dispel rumours that it has a hidden agenda, adding that the government must speed up the payment process, because the period for handing over the assets of PHCN to the private operators is near.