Tag: DISCOS

  • ‘Fed Govt’s licensing of DisCos violates 1999 Constitution’

    ‘Fed Govt’s licensing of DisCos violates 1999 Constitution’

    •‘States should approach Supreme Court on power sector decentralisation’

    Dr Fodil Olanrewaju Mohammed-Noah is an energy law expert, an electricity rights advocate, Fellow of the Centre for Petroleum, Energy Economics and Law (CPEEL), University of Ibadan; Associate-in-Chambers, Wale Taiwo & Co; and Principal Counsel, MC Noah & Associates (Legal Practitioners). In this interview with Deputy News Editor JOSEPH JIBUEZE and ADEBISI ONANUGA, he analyses the limits of the Federal Government’s powers in the 1999 Constitution regarding electricity distribution.

    Since 1972, in the days of the National Electricity Power Authority (NEPA) and through the era of the Power Holding Company of Nigeria (PHCN) till date, the Federal Government of Nigeria has been the sole regulator of the power sector. From the outcome of our research, we discovered that the Federal Government is not the only regulator required to participate in the power sector. So, as far as the constitution is concerned, right from the 1963 Constitution, 1979 Constitution and 1999 Constitution, electricity is not the sole preserve of the Federal Government to manage. We discovered that the distribution segment of the power value change, being the one that is closest to the consumers, is the exclusive preserve of the state.

    What is the extent of the Federal Government’s powers over distribution?

    The Federal Government, through its agency (Nigerian Electricity Regulatory Commission), has little or no role to play in the distribution network, including licensing the distribution companies (DISCOs). It is a clear violation of the Constitution for the Federal Government to license the DISCOs. It is the business of the individual states to do that within their domains. That is what the Constitution stipulates. In 1963, the Federal Government and respective state governments could freely legislate on electricity operations in Nigeria. However, the powers of the two levels of government to make law on electricity as an item are limited under the 1979 and 1999 constitutions.  In other words, while the Federal as well as the respective subnationals can freely participate in any segment of the power value chain under the 1963 Constitution, such latitude is not allowed under the 1979 and 1999 Constitutions. 

    What are the relevant sections in the 1999 Constitution?

    Under Item F, Part 2, Second Schedule to the 1999 Constitution, the powers of both the Federal Government and state governments to legislate in the power sector were limited. Those powers were arraigned under paragraphs 13, 14, and 15 of the aforesaid Item F in such a way that the Federal Government’s powers are encapsulated in Paragraph 13 thereof, while the areas in which the state governments are allowed to participate are enshrined in Paragraph 14 thereof. For the avoidance of doubt, Paragraph 15 of Item F, Part 2, Second Schedule to the 1999 Constitution defined the word ‘distribution’ as the supply of electricity from a substation to the ultimate consumer. Section 4 of the 1999 Constitution provides the guiding principles governing the state of affairs for both the Federal Government and the respective state governments and this applies to all items in the Concurrent Legislative List. So, under Section 4, the constitution provides the extent to which the Federal Government only can go in legislating on an item, while it also provides for the extent to which the state governments can go. A similar instance is found in an item relating to revenue generation where the constitution allocates certain powers to the Federal Government as well as the state governments and demarcates the area of influence of each level of government. For instance, the constitution has made it the role of the Federal Government to collect Company Income Tax, However, Personal Income Tax falls within the purview of the state to collect; notwithstanding that the policy area of those taxes is prepared and made by the National Assembly as represented by the Senate and House of Representatives.

    Can you further explain these constitutional limitations?

    In item F of Part II, Second Schedule to the 1999 Constitution, as amended, three components: power generating stations, transmission systems and distribution systems are found in paragraphs 13, 14, and 15 thereof. While Paragraph 13 of Item F creates a column where the Federal Government can make law, Paragraph 14 provides a column where the state governments can legislate upon. Specifically in paragraph 13 (a) of Item F, the National Assembly can make laws relating to the establishment of generating plants like Kanji, Shiroro, and Jebba dams and most lately, we have the Kashambila dam that has just been inaugurated. Also, we have Egbin Power Station which is the largest thermal station in Nigeria. Those are the areas in which the Federal Government can validly make laws.

    How about the states?

    Also, in paragraph 14 (a) of item F, Part II, 2nd schedule to the 1999 Constitution, the states are empowered to generate electricity and establish power-generating plants. It means that in electricity generation, both the Federal Government represented by the National Assembly and the state houses of assembly can validly make laws.

    Does this apply to the transmission segment?

    Also, in the transmission segment, both the Federal Government and the state governments can validly legislate under Paragraphs 13 (b) and 14 (b) of item F, Part II, 2nd schedule to the 1999 Constitution. However, by section 4 (5) of the 1999 Constitution, there is this proviso. Where we have an item upon which the Federal Government and the state governments can validly legislate, the moment the Federal Government makes a law to govern that area, the power of the state would go into abeyance. It is not that they don’t have that power, but they won’t be able to exercise same because there is an existing legislation of the Federal Government on that same subject matter, notwithstanding that the state governments can also legislate on that area. So, by the principle of covering the field (also known as the inconsistency rule), the power of the state governments to make laws will be frozen at that particular point in time.

    How about the distribution segment?

    In the last segment called Distribution Network, the Federal Government has no say, as a general rule. It is the states’ exclusive preserve to manage the distribution network of the power value chain. The Federal Government has little or no role to play. If there is going to be any role as far as the constitution is concerned, under Paragraph 13 (d), Item F, Part II, 2nd Schedule to the 1999 Constitution (as amended), it is only in the borderline area. If the Federal Government deemed it necessary to participate in the distribution value chain, it could only do so through the borderline areas which fall within a radius of areas partly within Nigeria and partly outside Nigeria. And that one is a question of fact. If that one does not exist, the state government is the only exclusive regulator of the distribution side of the power value chain.

    Where does distribution network fall?

    We have two network systems in Nigeria, and they are monopolistic in nature. We have a transmission system which is a monopoly of a kind. We also have a distribution system. So the transmission System is managed by the Transmission Company of Nigeria (TCN). That one was not privatised till date. It is in the hands of the Federal Government. We now have a distribution system. That is what the NERC is managing. In 2013, the Federal Government privatised that segment of the power value chain. That is a different network and that’s why we have 11 DisCos. We have examples of these networks in Eko Disco and Ikeja Electric. So Eko Disco and Ikeja Electric are the ones managing Lagos electricity through a license given to them by NERC. 

    Can it be said the Federal Government has usurped the function of Lagos in that area?

    Yes. They took it and it is unconstitutional. No law gives them the power to do so. So it is a violation of the constitution for the Federal Government to do so and they have been doing this as far back as 1972 when NEPA was created; when electricity management was centralised through NEPA. Before then, we had the Niger Dam Authority (NDA). We also had the Electricity Corporation of Nigeria (ECN). Those are the entities that supplied electricity then at both generation and distribution levels. They were separate entities. But in 1972, under the Yakubu Gowon Administration, it was centralised to form NEPA. That was what obtained until 2005 when we had the Electric Power Sector Reform Act of 2005 during the Obasanjo Administration that oversaw the power sector reforms.

    How would you situate the power plants established by states?

    We have some electricity power operators called Independent Power Producers (IPP). They allow them to generate electricity through a license. It is still within the overriding control of the NERC. It is even an anathema to have what we call the Nigerian Electricity Regulatory Commission (NERC). It should be the Federal Electricity Regulatory Commission. This coinage (FERC) takes into cognisance that states have the right to set up their own electricity regulatory agencies without any interference. In the U.S. from where we drew our inspiration for electricity management, we have what you call the Federal Energy Regulatory Commission (FERC). Also, we now have the State Public Utility Commission (SPUC). Both operate hand in hand. While the FERC of U.S. handles power in bulk that move from one state to another, the SPUC, handles power within their domain. In fact, they are the ones that can fix tariff on electricity that flows within their domain. The significance of managing distribution network is that they must be the one that will license DISCOs.

    So, the Federal and state governments can validly legislate on electricity?

    Yes! It is called the Concurrent Legislative List. Electricity has been there as far back as 1963, and it has not changed to date. It is found in Item F, Part II, Second Schedule to the 1999 Constitution. There is this perception from the public and some lawyers who pontificate on both radio and other media houses that electricity falls within the exclusive legislative list. It’s wrong. It is a wrong perception. It is an error. I will show you where you can find my position in our constitutions. I can show you where it falls in the 1963 Constitution, 1979 Constitution, and 1999 Constitution (as amended).

    What about the states like Abia nd Enugu that are already setting up power stations?

    Let me tell you what is different there. If you use the word power station, they are still within generation. It is not distribution. Generation is different from transmission and distribution. Let me now give you an instance. By having a generator at home, you are generating in your own house. The generator itself is a generation plant. So let’s demystify what they are doing in Aba and Enugu. They are only generating. But the problem lies with the systems, the two systems that are monopolistic in nature. The transmission system is a monopoly in the power sector all over the world. It is a monopoly and not everybody can operate there. Then we now have distribution. It is instructive to note that in Paragraph 13 (b) of Item F, Part II of the Second Schedule to the 1999 Constitution, generation and transmission of electricity were mentioned; while the word ‘distribution’ was conspicuously absent in the Federal Legislative Column. However, in the state legislative column under Paragraph 14 (b), generation, transmission, and distribution of electricity are conspicuously present. The only constraint is that, in respect of generation and transmission, the state governments may have their powers curtailed in view of Section 4 (5) of the 1999 Constitution.

    Do states need to apply for license to manage distribution?

    No. The Federal Governmnt, however, thought it had that power. It does not. In fact, the state does not need to write a letter to the Federal Government for permission to manage the distribution segment of the power value chain. I’m not bothered about the generation. The Federal Government can continue to keep Jebba Dam, Shiroro Dam, as well as Kainji Dam. Interfering with the flow of water from sources in any part of Nigeria is the exclusive preserve of the Federal Government. Such interference is a red zone for the states.  In the same vein, electricity distribution is a kind of red zone for the Federal Government to participate in. The state government cannot even waive its right such that it enures to the benefit of the Federal Government. The only area where the Federal Government can participate in distribution activity is when it covers an area partly within Nigeria and partly outside Nigeria.

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    For example, we are giving Benin Republic electricity. So if you have borderline area that the Federal Government supplies power to and it runs into the Benin Republic, it has the exclusive preserve of that distribution network. It must also be noted that, apart from transmission lines which have 330KV, 132 KV, distribution lines have the trio of 33KV, 11KV, and 415 Volts.

    Do you think the fact Federal Government owns most power infrastructure is a factor?

    No! The moment something is done, and such thing violates the constitution, it is subject to annulment by our courts. It does not matter if such an act is being repeated for upward of 50 years. Once it is shown that such an act is beyond the constitutional purview of what Section 4 of the Constitution prescribes, our courts will move in to stop any excess in the exercise of legislative power. Both Federal Government and state governments are creations of the constitution.

    Has a court ruling or order been validating that section? 

    Section 4 of the 1999 Constitution validates itself since it is clear. This area of research is novel. There has not been any step taken to deal with that area. But we have seen that the principle that guides all these activities is still Section 4 and we have seen some activities that indicate areas where the principle has been applied. For example, during Obasanjo’s era as the President, he seized local government funds and Lagos State went to court. The Supreme Court held that the Federal Government has no right to do so. There is an example of revenue allocation too. There are many cases relating to these items of the constitution where Section 4 comes to play to deal with it. The latest one is the steps taken by the Attorney General of the Federation on Local Government fund to show that the fund is not meant for the states. They only take it for and on behalf of the Local Governments under them. And now it has been settled by the pronouncement of the Supreme Court under section 232 of the constitution. That one has been settled. But this one has not been tested, and that’s why it is novel in the history of our electricity management. It is so clear that it doesn’t need too much noise to remediate it and the long years of violation of the constitution does not ripen it into something that is right.

    Do you think states have the capacity in their own right to handle this distribution?

    Let me tell you. They have. We are talking about states. We are not talking about individuals now. Forget about governors. With the pronouncement of the Supreme Court on the right of local government to manage their own fund themselves taking effect, next election will be tough and competitive because some people with capacity will come up to contest. There will be more capable hands that will contest local government elections in the next dispensation. It is going to be a fight. It will give room for competition, healthy competition. Can the state do it? There are many things states are doing efficiently more than the Federal Government. I can say this conveniently that corruption, because I was asked at the ARISE TV interview about the capacity of the states as if governors are demons, how can we curb corruption? Let me tell you, the worst form of corruption is violation of the constitution. If the constitution is not violated, there will be a limit to which corruption can fester; if the laws are being implemented, there will be little people that would violate the law. So, the states can do a lot and the example of this is this: Lagos state can handle its security through various security outfits they have. You will realise that when South Western states were establishing Amotekun, Lagos state did not do so because it already had an outfit that is working; an outfit that is fit for purpose. Also, Lagos state, through its efforts in the transport system, has been a consultant to many states, and this workable model is being replicated at the federal level; including taxes. I don’t know whether you’re aware that they are trying to reform tax management at the federal level when Lagos state has done it over the years.

    Would you advise states to seek its interpretation? How can they begin to implement this section?

    The states are already agitated seriously and I am aware of that. Many of them erroneously were doing laws on this area. The laws will meet brick walls in the Electricity Act in view of section 4(5) of the 1999 Constitution. You know, when this dispute happens, nobody will go outside the law. Even if the Federal Government has to contest, it will contest within the confines of the constitution. This is Electricity Act of 2023 that the President assented to on the 8th June, 2023. The wrong impression is that this Electricity Act now gave states right to participate in the power sector. It is a lie from the pit of hell. That was why I said that as far back as 1963, state governments have that power, notwithstanding the existence of Electricity Act. In fact, the research went further to discover that we have close to nine provisions in this Act that offend the 1999 Constitution. Sections 34, 63, 68, 113, 114, 115, 116, 226, and 232 of Electricity Act 2023 have provisions relating to distribution segment of the power value chain which offend the 1999 Constitution. Those provisions are all amiable to nullification if the states approach the court because those provisions will be affecting the power of the state to play its rightful role in the power sector. Don’t get me wrong. The area that exclusively enures to the benefits of the states is the distribution network. If the states successfully take over distribution network, it will create needed stability in the power sector.

    When our President was governor of Lagos state, the state partnered Enron as a generation company, this laudable but audacious move failed to succeed because of the distribution network. This is because when you produce power, you must evacuate it to a system and that system is transmission system. From there, it will be transferred to distribution. One important thing is this: the states don’t need transmission network to get light to the ultimate consumers. They don’t need it. The Federal Government acknowledged this when the NERC made a regulation in 2012 called Independent Electricity Distribution Network of 2012. What that one says is that they can create an independent system that will link to the distribution system to provide light. They don’t need to go through transmission. This means that when you evacuate power from the generation company to the states, the states don’t need transmission. In Benin Republic, there was no transmission network because the country relies on our transmission network to feed its distribution system. Nigerian government supplies the French-speaking country. I have been to Benin and Togo, in respect of this research to see how the distribution network works. They don’t have transmission, and they’re having light. They don’t generate at a large scale. They rely on Nigeria for power supply. If they have generation, at all, it may be off grid, like the, solar energy. They can have that. They can even have generators like you have in your homes.

    So what is your advice to deal with this situation?

    My advice is simple. In order to deal with the stumbling block, there is need to seek the interpretation of Section 4 of the 1999 Constitution as it applies to electricity as an item in the concurrent legislative list. I was, sometimes, at the Lagos State Ministry of Energy where I was reliably informed that a law to govern electricity is in the offing. I am equally aware that the state had in place before now the 2018 Lagos State Electric Power Sector Reform Law. The wrong impression is that, since electricity Act has come up, the states are now making laws pursuant to the Electricity Act. My position is that they are wrong. They should make their own law in line with the constitution and simultaneously seek the interpretation of Section 4 of the 1999 Constitution as amended. They don’t need to even seek the permission of the Federal Government.

    You’re saying that the Electricity Act is not binding on the states?

    No! But because of Section 4(5) of the 1999 Constitution, the Supreme Court will be the appropriate arbiter to deal with the situation under Section 232 of the Constitution. What that provision states is that when there is a dispute between states and the Federal Government any aggrieved entity can approach the Supreme Court for resolution. As of now, the states do not feel there is a dispute; they are just grumbling.

    But Ekiti State has made a law?

    Yes. Ekiti State has made a law the way Lagos State did in 2018.The state desired by its law to take over the distribution network. There was thinking towards that direction. However, the state was advised that such attempt will not be possible; and I agree that it will not be possible. What the state can do is to approach the Supreme Court under section 232 of the 1999 constitution and invokes its original jurisdiction to interpret Section 4 of the constitution vis a visItem F, Part II, Second Schedule to the 1999 Constitution as amended. What the states need is to take control of the distribution network. The Federal Government will still be in charge of the transmission network because transmission network is useful to other West African countries. You can see that when Niger Republic had diplomatic issues with ECOWAS, the Federal Government shut down its transmission line that supplies the French-speaking country thereby leading to disruption of the country’s economy. Nigerian electricity is the sole preserve of our economy. If electricity is not gotten right, there will be no development. And we have been in this for the past 40 years. If we don’t deal with it by doing the right thing, we will still be in it for the next 40 years. So, any of the state governments can approach the court by invoking the original jurisdiction of the Supreme Court to interpret those provisions of the constitution relating to electricity. If the states take over the distribution network, there will be much more investments and electricity by nature thrives on economies of scale. The more energy we have, the less our cost. We have 5,375 megawatts at the highest. I learnt that in 2020. 2.8 megawatts was added, while the US has over 1,325 terawatts of actual electricity generation. This is not megawatt. Megawatt means 1,000,000 {1 million} watts. Gigawatt means 1,000,000,000 {1 Billion} watts. When you now have 1 terawatt, it means that you have 1,000,000,000,000 {1 trillion) watts of energy. We are talking about actual generation capacity which is different from installed capacity. Nigeria of over 200 million people has just a little above 12,000 megawatts installed capacity of energy and we are unable to generate half of that. We only have, at the peak, 5,375 megawatts. Perhaps, this is because we are not using electricity for development. Perhaps, the meagre amount of energy is even too much for us because what we usually need energy for is just bulb, fan, may be Air Condition (AC). This stems from the fact that Nigeria is a showroom economy; a dumping ground for all manners of imported goods.

    How is it done in other climate that all is so well?

    We were inspired during the 1979 move to the presidential system. We adopted wholesale the concept of electricity management in the USA. The USA is a prototype federation. It is the most recognised federation all over the world. So, we adopted the US-type Federal system of government. As we are habitual lawbreakers in Nigeria- both governed and government- we do it things wrongly in every aspect of our lives. Look at 6-3-3-4, educational system. It was adopted wholesale from the US, but we are still doing WAEC. And we don’t need WAEC. The 6-3-3-4, Senior Secondary School Certificate covers that part of the educational level. We are still doing WAEC till date. Notwithstanding that we claim we adopt 6-3-3-4 from US since mid-80s during Babangida’s regime. But we are still doing it the wrong way, and we are still doing the same thing here in electricity and that is why we don’t have electricity. Obasanjo wrote in his book, My Watch, that eight years is not enough to fix the problems in the power sector; even if we have all the money required to fix same. I did concur in my research with his conclusion and I dare say, 40 years also is not enough to fix the problems if we are still doing it the wrong way.

    USA has one of the highest transmission lines in the world and that is about 600 kilovolts (KV). But in Nigeria, we have 330 kilovolts. During the Jonathan era, they wanted to do up to 700. We like dreaming. We continue to dream; when that dream expires, we start another dream. That’s what we do in Nigeria. So USA is an appropriate example of a federation that got it right in its electricity governance. It is not that USA does not have challenges. In fact, my research goes on to discover that there is no electricity management in any part of the world that does not have its own fair of challenges. But when there is robust reform process in place, such a process will take care of those challenges.

    So, what is our own situation like?

    In our own case, it is as if we are still in the 1930s of the US. In 1930s, the country had its own fair share of challenges; although they were all surmountable. Presently, USA has electricity in excess. But in our own case, we are in dire need of electricity like someone in coma. Without it, there will be no development. Without it, there will be no company to operate optimally. We’ll just become showroom for other countries to showcase their products. We’ll now be a buying and selling country (mercantile economy) and that is what is creating unemployment in Nigeria, and it is leading to insecurity. If you are not electricity secured, there will be no security in Nigeria.

    So, what is the way out?

    What should be done is this. Any of the state governments can approach the court. The right relating to electricity regulation concerns the states than any other non-state actors. Instead of going cap in hand to the Federal Government to beg for license, the states can get it right by taking the bull by its horns. Doing this can create an economy of a kind such that the IGR of each state will soar. We have a country; a beautiful country that is untapped. What we can use to tap it is electricity. So if the states approach the Supreme Court to interpret section 4, vis-a-vis item F, showing that the Federal Government has no right to manage distribution network of the power value chain, this will enhance stability in the constituent states. That is where the money is. It is the DISCOs that take money from the consumers and pay generation companies as well as the Transmission Company. I have seen reports of how these DISCOs are mismanaging a humongous amount of electricity earnings in the power sector. They don’t have exclusive ownership of that money. They have to give out to the transmission. But they are perpetually in arrears of their due remittances.

    Is it subsidy that prevents them from paying other deserving operators?

    No. Ordinarily, you know, we have very little power and I have said that electricity, as a product thrives on economies of scale. The more power you get the lesser costs it attracts, we don’t need less than, at least to start with a 100,000 megawatts. We are in 5,000 megawatts. Very few companies, very few industries in Nigeria; at their optimal capacity, can consume 5,000 megawatts. The highest electricity-generating country in the world is China, followed by US and you can see the population. Unfortunately, our population is going on a geometric progression while we are even retrogressing in our electricity. We are supposed to be at par with our population because every part of the community is being developed to consume more electricity. The moment you have one bungalow becoming four, it means that they need more power. If you want to measure poverty, you measure it by the amount of power available to you. To identify a poor man, check the amount of energy available for his use. That is energy poverty. So the states now can approach the Supreme Court, invoke the original jurisdiction of the court under Section 232 of the Constitution. What makes it so beautiful is that the facts available to deal with the situation are not contestable. They are so clear, clearer than what obtained in the local government fund dispute, which has been settled now. In this present scenario, the issue that arises for determination is: who has the right to manage distribution network? That is the simple question to settle by the court. The interpretation of this by the Court may necessarily not go beyond the application of literal rule. The Court may not find the need to apply progressive rule of interpretation as it did in the local government fund decision. By that decision, the Federal Government has the power to withhold any local government fund that does not have elective officials. I strongly believe that this modest endeavour by the states will succeed. When it succeeds, it will positively impact the economy in all the states because they will be in charge of their electricity. It is not out of place to opine that the worst form of hunger in Nigeria is the need for light to power our homes, businesses, industries, etc. If electricity is available, we’ll be able to produce more food through, mechanised farming. Many investors in Nigeria did show interest in investing in the generation segment of the power value change, but when you have distribution network that is out of tune with reality, such investments will not materialise. If the state government takes charge of the distribution network, at least Lagos state will feel the impact. Lagos is struggling and I pity Lagos State. Lagos State is one of the foremost states that, have a lot of potential, and they are ready to explore it. In 2017 or thereabout, the super minister; the former governor of Lagos State; Babatunde Raji Fashola, SAN because of his influence as Minister of Power, Works and Housing, was able to secure a memorandum of understanding (MOU) between TCN and Eko Atlantic to supply 20 megawatts of power so that they can power that edifice. After he left, I doubt if that MOU still subsist. The Eko Atlantic is the creation of the state. They have it. If they have the distribution network, there is no problem to supply them power within the state. There will be more generation company that will crop up because they are ready to go as I saw, and as I witnessed in the Lagos Ministry of Energy. They will be able to manage electricity within the state. They don’t even need the transmission network where the national grid collapses every time.

    What is the installed electricity capacity?

    We have over 12,000 megawatts of installed capacity. Yes. The transmission network has up to 8,100 capacity to hold power while the distribution network is at the level of 5,000 plus. But the moment transmission network gets to 6,000 megawatts, there will be a curve and there will be a collapse. It is struggling to hold up to 6,000 megawatts/hour of electricity. It will collapse because there’s a limit to which it can handle. But there is a beautiful concept in the Constitution. There’s a robust concept created for electricity in the Constitution, but we did not make use of it. If the states, as I repeat, go to the Supreme Court; validate their position, they will be able to generate more investments for generation that will link distribution networks. If that was done during the present President’s era while he was governor in 2001, he would be able to succeed in his effort to light up Lagos. Unfortunately, ENRON collapsed because there was nowhere to evacuate and push the power to. The highway through which electricity passes is the network and as I said, it is monopolistic in nature. This problem is further compounded by the rent-seeking attitudes of those presently managing the distribution network. They don’t mean business. They don’t even desire more power because of the windfall necessitated by uncharitable estimated billing. In fact, they reject power in some situations because they believe that they won’t be able to pay back the amount of energy willed to them and that is why they don’t even like to have more power as they get more money through estimated billing.

    That’s why they keep us in darkness?

    Yes. Estimated billing, that’s where they make a lot of money. I did a research on estimated billing, and I see in my research; using my flat as a case study on amount of energy I consume through metered and through un-metered billing. Six months of estimated billing, they told me that I consumed over 3,000 kilowatts of energy. Whereas, when I was metered within one year, it was around 700 kilowatts. In monetary terms, I was made to pay over N100’000 in estimated billing. Whereas, through metered billing, I was made to pay around N23’000 within a year.

    Is there any solution to the incessant collapse of the grid?

    The solution is to decentralise. The philosophy behind electricity management is that in a federation like ours, we cannot survive with centralised governance. We can only survive with the decentralisation of the power systems. It is not rocket science. The constitution has provided for it for the past 50 years, only that we refuse to follow it. Nigeria is a country where we don’t have respect for rule of law. The only fruit that respect for rule of law can provide is stability, efficient administration, economic progress, and satisfaction among citizens. Energy deficiency can create insecurity in the system and that is exactly what we are having. If you want to stop it, even in the interim as a stopgap, the states must be up and doing. They must take the bull by the horn like the Attorney General of the Federation did two months ago to resolve the crisis of Local Government fund. I believe these states can do a lot if this decentralised option is undertaken. We only need to follow the constitution. It’s there. It will be most uncharitable if a foreign expert is brought in to advise us – for a humongous fee – that we should hand over this distribution network to the states. You know, Nigerians like anything imported, including imported advice. If one expert, who comes into Nigeria by invitation, now advises our state actors on this, they will be eager to implement it because such advice is made in abroad.

  • Consumers seek establishment of unit to monitor DisCos’ performance

    Consumers seek establishment of unit to monitor DisCos’ performance

    Following the order of the Nigerian Electricity Regulatory Commission (NERC) which threatened to sanction electricity Distribution Companies (DisCos) for poor performance,  the Electricity Consumers Protection Advocacy Center (ECPAC), has urged the Federal Government to establish a consumer protection center in the Federal Ministry of Power.

    Its Executive Director, Princewill Okorie, called on the government to saddle the consumer protection unit with the responsibility of monitoring the performance of the DisCos in line with the Electricity Act 2023 and the commission’s regulations or orders.

    In a telephone chat with The Nation, yesterday, Okorie wondered how consumers who are ignorant of the order and the Act can monitor and report on DisCos’ performance. He tasked the government on a nationwide consumer enlightenment campaign that can equip them to know the regulations and their violations.

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    He recalled that he had already written a letter to the Minister of Power, Adebayo Adelabu, informing him on the urgency of the establishment of the consumer unit in the ministry.

    Okorie said: “Pronouncement is one thing, enforcement is another. NERC has pronounced this. Who will monitor it? Who will bring the report? The consumers that will bring the report, are they aware of the regulations?

  • DisCos attribute outage to grid collapse

    DisCos attribute outage to grid collapse

    The national grid collapsed again on Saturday, according to the Abuja Electricity Distribution Company (AEDC).

    In a notice to its customers, the management said: “Please be informed that the power outage being experienced is due to a system failure from the national grid at 3:10pm today (Saturday), affecting the power supply to our franchise areas.”

    AEDC said it was working with the relevant stakeholders to restore power as soon as the grid is stabilized.

    Also confirming the collapse, the Enugu Electricity Distribution Company PLC (EEDC) said the incident occurred around 3:09pm.

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    Its Head, Corporate Affairs, Emeka Ezeh, in a public notice, a general system collapse was recorded at 15:09 hour of Saturday.

    The situation, he said, ked to loss of power supply.

    “This is to inform our esteemed customers of a general system collapse which occurred at 15:09 hours today, 6th July, 2024. This has resulted in the loss of supply currently being experienced across the network,” said Ezeh.

    But Transmission Company of Nigeria (TCN) Public Affairs, General Manager, Ndidi Mbah, did not respond to calls by The Nation.

  • FG secures $500m World Bank loan to boost DisCos

    FG secures $500m World Bank loan to boost DisCos

    The federal government has secured $500million loan from the World Bank to improve electricity Distribution Companies (DisCo) performance.

    This was contained in a press statement by the Bureau of Public Enterprises (BPE), Head, Public Communication, Amina Tukur Othman, issued on Thursday, May 30.

    She said, approved on February 4, 2021, by the World Bank Board of Directors, this funding supports the Nigerian Distribution Sector Recovery Program (DISREP) aimed at improving the financial and technical performance of the DisCos.

    The Distribution Sector Recovery Program (DISREP), said the Head of Public Communications, is designed to enhance the financial and technical operations of the DisCos through capital investment and the financing of key components of their Performance Improvement Plans (PIPs), which have been approved by the Nigerian Electricity Regulatory Commission (NERC).

    She said the key areas of improvement include:

    • Bulk procurement of customer/retail meters and meter data management systems.

    • Implementation of a Data Aggregation Platform (DAP).

    • Strengthening governance and transparency within the DisCos.

    • Program Components

    • The DISREP comprises two main components:

    • Program for Results (PforR):

    • Allocation: $345 million

    • Purpose: Support the implementation of selected PIP components.

    • Implementation: Bureau of Public Enterprises (BPE)

    • Investment Project Financing (IPF):

    • Allocation: $155 million

    The Purpose is to finance the procurement of meters, a Data Aggregation Platform, and Technical Assistance.

    Read Also: DisCos remit N189b out of N270b total invoice

    The statement added that the DISREP loan, particularly the Investment Project Financing (IPF) component, is expected to significantly benefit the Nigerian Electricity Supply Industry (NESI) by:  Closing the metering gap

    • Reducing Aggregate Technical, Collection, and Commercial (ATC&C) losses

    • Improving remittances and liquidity for the DisCos

    • Enhancing the reliability of power supply

    • Increasing transparency and accountability within the DisCos.

    BPE further noted that the $500 million DISREP loan from the World Bank offers concessional financing with more favourable terms than commercial bank loans.

    This, she said, will enable the DisCos to:  Invest in critical distribution infrastructure, improve ATC&C losses, and increase power supply reliability.

    It will also achieve financial sustainability in the power sector, and enhance transparency and accountability.

    BPE said: “Significant progress has been made in the preparation of the DISREP Program, with several key milestones achieved, and approval by the Federal Executive Council (FEC) on August 3, 2022. execution of the Financing Agreement by the Federal Ministry of Finance, Budget and National Planning, and the World Bank, adoption of the Program Operations Manual (POM) by BPE and TCN, obtaining Legal Opinion from the Attorney-General of the Federation, Execution of the

    Subsidiary Loan Agreement, effective declaration of the DISREP Program on

    January 31, 2023, inauguration of the DISREP Technical Committee on May 6,

    2024, inclusion in the Federal Government Borrowing Plan, approved by the Senate Committee on May 16, 2024.”

    The spokesperson said to ensure repayment assurance, the BPE sought and obtained approval from the Nigerian Electricity Regulatory Commission (NERC) and the National Council on Privatisation (NCP) for a structured repayment hierarchy.

    It added that this structure prioritizes payments as follows: Statutory Payments (Taxes); repayment of CBN market loans; Market obligations, repayment of DISREP loan; and DisCos’ net revenue.

    BPE said this structured repayment plan aims to mitigate risks associated with repayment uncertainty and defaults, with regulatory sanctions imposed for any defaults.

  • DisCos remit N189b out of N270b total invoice

    DisCos remit N189b out of N270b total invoice

    The 11 electricity distribution companies (DisCos) in the country paid N188.70 billion to the Nigerian Bulk Electricity Trading (NBET) Plc and the market operator (M0) in the third quarter of 2023.

    The payment is 69.88 per cent of the total invoices of N270.05 billion issued for electricity purchased from generation companies (GenCos) and supplied to electricity consumers in the quarter.

    This was contained in the fourth quarter 2023 statutory report released by the Nigerian Electricity Regulatory Commission (NERC).

    An analysis of the data contained in the NERC’s statutory report, indicated that Eko Electricity Distribution Company (EKEDC) achieved a 97 percent threshold by remitting N37 billion, showing a 3.5 per cent drop from the previous quarter. Kaduna Electric had the lowest remittance, in the period under review, having paidN1 billion, representing nine per cent of the NBET/MO invoices. It also dropped by 50 per cent in payment rate compared to the previous quarter.

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    Still, the remittances in the Q4, 2023, further showed that Yola Electricity paid N2 billion, representing 87 percent and dropping by 13.4 per cent, while lkeja Electric paid N35 billion, with a payment rating of 79 per cent, which also decreased by 10.3 per cent when compared with the previous quarter.

    Abuja Electric recorded a 75 per cent performance with N36 billion paid, a 0.3 per cent drop, and Benin Electricity Distribution Company remitted N15 billion, achieving a 74 per cent remittance target, and a 0.9 per cent drop.

    Port Harcourt DisCo paid N14 billion, representing 74 per cent of the invoice, dropping by 4.7 per cent while lbadan Electricity Distribution Company ((BEDC) paid N20 billion, representing 68per cent of the invoice, and dropping by 8.3 per cent compared with the previous figure. Enugu DisCo (EEDC) paid N14 billion, with a payment rate of 55 per cent of its quarterly invoice and dropping by 3.9 per cent in payment rate compared with Q3, 2023.

    Jos Electricity paid N6 billion, 54 per cent of the actual invoice, a 0.7 per cent drop, while Kano Electricity paid N9 billion, 53 per cent of the invoice, recording a drop in its payment rate of about 13 per cent compared with Q3,2023.

    The 11 DisCos are mandated to collect revenue based on approved tariffs, which are subsidised by the government ahead of a gradually transition of the sector to cost-reflective levels.

    The mandate is structured under a contract-based electricity market with NBET, functioning as the bulk buyer of power generated and put on the National Grid by the GenCos through a Power Purchase Agreement (PPA).

    The payment shortfall by DisCos, known as the Minimum Remittance, was assigned by the NERC through the Minimum Remittance Order, required the 11 DisCos to make 100 per cent remittances to the MO, repay loans to the Central Bank of Nigeria, and remit a stipulated percentage of NBET’s monthly invoices.

  • NERC, DISCOs and vexatious tariffs

    NERC, DISCOs and vexatious tariffs

    On the surface, the new electricity tariff approved by the Nigeria Electricity Regulatory Commission (NERC) should help address the massive subsidies tearing the power sector apart. Between 2015 and 2023, says the commission, the nation subsidised electricity consumption by about N348trn. This is exceedingly huge, though the agency does not quite show how it arrived at this figure. But it argues that if the new tariff regime, begun since April 3, is allowed to work, some N1.14trn would be saved this year in subsidies, a sum significant enough to begin changing the dynamics of the power sector. In order to anchor this policy, only 15 percent of electricity consumers classified into Band A would bear the burden of the new tariff regime. Instead of the previous N66 charged per kilowatt/hour of consumption, they are to pay N225 per kilowatt/hour. The steep rise in tariff has predictably triggered a bad-tempered debate on the timing and propriety of the increase.

    Apart from the public which has generalised the increase, instead of limiting it, as NERC has done, to a category of consumers, the House of Representatives has also waded into the skirmish by asking NERC to stay action on the increase. Whether the commission will heed the lawmakers is unclear. But in addition the Nigeria Labour Congress (NLC) on May Day gave NERC an ultimatum to reverse the increase or face industrial action. But the hunch of most Nigerians is that the real public dissatisfaction with the new tariffs will manifest when the first bills come out in early May. The lower class will discover their bills have been minimally affected, while the upper class consumers, including factories, who by the way influence and shape public discourse and instigate actions, will be numbed by their new bills. It is also not known why NERC advocates this humongous leap in tariff in one fell swoop instead of gradual increments. May 2024, it is now clear, will determine everything, especially as this eerie month seems to crystallise policies inflicting hardship on the people.

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    As the Bola Tinubu administration battles with resetting the economy, particularly doing away with a whole regime of subsidies unwisely and incompetently implemented over the decades to the immense distress of the economy, it must find the ingenuity to contend with the drawbacks of the electricity tariff increases. Two major things are wrong with the new tariffs, and they invite the administration to reconsider the cost and benefit of the policy. Firstly, the policy is poorly timed. The Power ministry, NERC and the administration should have waited until the NLC minimum wage agitation was resolved before adjusting the tariffs. Now, even though they are agitating against the tariffs, the labour unions have nevertheless factored the increases into their wage demands. They are justified. And considering that Nigerians are still struggling to cope with, or recalibrate their incomes to meet, the new demands on their household incomes, and recognising also that the economy could not be completely or significantly reset in two years, let alone in a few months, the administration should have both phased its war against subsidies as well as synchronised the responses of the ministries to the distressed and disarticulated economy.

    Secondly, Power minister Adebayo Adelabu simply fails to understand the main problem with the new tariff regime. The problem is not whether tariff should be adjusted upwards; it is long overdue. The problem is also not whether discriminatory pricing of electricity consumption should be instituted; NERC has always done that anyway. The chief problem, however, is how the increases and discriminating tariffs are conceived and implemented. The capacity to pay or income of the consumer should never, ever be tied to the amount of electricity supplied to a consumer. By tying supply, in this case 20 hours for Band A, to the ability to pay, is iniquitous, discriminatory and unfeeling. A better approach is to ensure uninterrupted supply to every consumer, while discriminatory pricing should then follow and be specific to neighbourhoods. To give more hours of supply to the rich and fewer hours to the poor is a bad policy unmitigated by public sentiments for and against subsidies. Indeed, the administration must be careful about policy overload, particularly policies that eat away at the people’s disposable income and further impoverish them.

    NERC and the DISCOs have put the cart before the horse with discriminatory pricing. They will not only contend with inflation certain to accompany manufactured goods, they must also contend with angry Nigerians who see the administration as unfeeling and contemptuous of the poor. This is a case of an ordinarily great policy badly and callously executed. NERC and the Power ministry should seize the opportunity of the House of Representatives motion to remedy the poorly considered policy. In the end they may not need to reduce the tariffs by a substantial margin or lose overall in terms of revenue. In fact in the end, if they are patient and reasonable, they will be the chief gainer.

  • Unbundling the unbundled Discos

    Unbundling the unbundled Discos

    The unbundling of the former National Electric Power Authority (NEPA) followed the signing into law by former President Obasanjo of the Electric Power Sector Reform Act which led to the formation of the Power Holding Company Of Nigeria (PHCN).

    By that Act, NEPA was broken into 18 companies- six Generating Companies, one Transmission Company and eleven Distribution Companies with each issued operating licences. But the actual privatisation of PCHN was consummated by former President Jonathan in 2013 when he handed over the subsidiary companies that made up PHCN to the new core investors.

    Between the time Obasanjo signed the Act and the actual handover of the companies to the new investors, the word ‘Unbundling’ gained so much prominence within the power sector that it was viewed as an elixir for all that was wrong with electricity generation, supply and distribution in the country.

    The enthusiasm was so high that it was generally thought that with privatisation, the challenges of epileptic and unreliable power supply that had virtually stifled national development would soon take the back seat. That was the level of public confidence reposed on privatisation in that sector.

     But 10 years thereon, that prospect has turned down a pipe dream as no significant improvement has since been recorded in that critical sector of the national economy. Rather, it has been more of business as usual raising questions on the appropriateness of the implementation and execution of the exercise.

    Time without number have governments after governments promised substantial improvement in power generation and distribution since the unbundling of the power sector, but all these have failed to materialise. Rather, we are regularly confronted by frequent collapse of the national grip. With regular breakdown of the national grid, it remains to be seen how the distribution companies assailed by debilitating operational hiccups will be able to make the required improvement in power supply.

    Not only has the country not gone beyond 4,000mw of electricity generation, a far cry from the overall electricity needs of the country, the distribution of the much generated has remained largely unsatisfactory leading to the exit of multinational companies due to inclement investment climate. It is a measure of the inadequacies of the power privatisation process that over these years, electricity supply and distribution have not really gone beyond the pre-privatisation era.

    It was a matter of time for the government to take another look at the entire exercise if the objectives of the unbundling exercise are to be realised. So when last month, the Minister of Power, Adebayo Adelabu threatened severe consequences against power distribution companies (Discos) for wilful non-performance, it was obvious the government was about to do something about the shortcomings of the unbundling process.

    Read Also: Govt to sell Abuja, Ibadan, Benin, Kaduna, Kano DisCos

    That threat was made good last week when he announced plans to unbundle power distribution companies Discos along state lines due to their large sizes; the inefficiency and ineffectiveness these engender. Additionally, the government directed the sale of Discos that have been taken over by banks or the Asset Management Corporation of Nigeria AMCON within the next three months. Through the sales, the government intends to ensure that the buyers are technical manpower operators with good reputation in utility management.

    Four of the Discos are under the management of the banks for their inability to pay the loans with which they acquired the companies, while the remaining one was taken over by AMCON. The Abuja Disco is under the management of the United Bank of Africa UBA while Fidelity Bank manages the Benin Disco, Kaduna Disco and Kano Disco. The Ibadan Disco is under AMCON management.

     Apart from the sale of the five Discos, the government intends to go further down the line to licence smaller Discos in areas of operation not fully covered by the existing ones.

    “We will start seeing regulations about franchising. The fact that you are Eko Disco doesn’t  mean that you cannot have smaller Discos that are ready to invest in your unserved communities. So we are looking at franchising”, Adelabu further explained.

    It is unclear whether the unbundling along state lines would be carried out before the proposed sale of the five Discos in the next three months. Also not stated is if the franchising the government plans for areas not covered by the current Discos will be done before the unbundling along state lines and sale of the itemised ones.

    Whatever the case, it is important that the government takes a holistic and more enduring perspective of its plans for effective electricity generation and distribution in the country. Adequate safeguards should be made to guard against the mistakes of the past.

    Before selling off the ailing Discos, the government must be clear with its plans on unbundling along state lines and franchising within the uncovered areas. This will entail proper delineation of the spheres of coverage of the Discos being unbundled along state lines vis-a-vis the areas that will be franchised.

    Through this, the government will checkmate  the clash of interest that may arise if the Discos are hurriedly sold off without earmarking the areas for franchising. The case of the 188-megawatt Geometric Power plant in Aba, Abia state which was commissioned last February should be instructive.

     The altercation that ensued on the alleged roles of some official of government agencies and the owners of the Enugu Disco that worked against the quick realisation of the project underscores the imperative for clarity on the spheres of operation of all power distributors. Such gaps should not be allowed in the new endeavour.

    With clarity on the spheres of coverage of the Discos that will emerge from the unbundling, prospective bidders will not be left in doubt as to what they are actually paying for. Then, the unbundled Discos including the ones that will be franchised can now be put up for sale. The sale of the five Discos under receivership must also follow the same path of unbundling and franchising.

    Overall, the measures earmarked by the government to ensure efficiency in the power sector are high-minded. It is clear from the woeful performances of the Discos that the privatisation of the power sector failed to deliver on its mandate. Both in terms of its execution and implementation, the privatisation process fell short of its laudable objectives.

    Not only are the buyers of the privatised firms contending with lack of relevant expertise to run utility firms, many of them did not have the required financial capacity to pay for the power companies. Faced with debilitating financial hiccups, the new investors failed to keep to their promise of injecting funds into the project to enhance their distribution network. It remains to be conjectured how such investments will be possible when the investors took quick resort to bank loans.

    They have since found it difficult to pay back the loans given the long time it takes for investments in that sector to mature and make returns to the owners. Nothing bears out this failure than the take-over of the management of the five Discos by the banks and AMCON.

     But it is neither the business of the banks nor that of AMCON to run power business they lack the requisite expertise. Even then, with the impending recapitalisation of the banks that will put serious stress on their capital base, the fate of the Discos under their management would rather worsen. This will entail dire consequences for the power sector.

    It is good a thing the Discos are being rescued through the measures listed by the government. In doing this, the Nigerian factor must be avoided like a plague. It remains a sad commentary that investors without the requisite expertise and financial capacity in the management of such a critical sector were allowed to buy off the privatised companies.

    What seems obvious from all this is that some other considerations than merit and capacity influenced the decisions of those that superintended over the sales. This is the time to correct all that. It is not another opportunity for those in power to now bring in their favoured ones and cronies.

    But the Discos are not the only challenge in the electricity supply and distribution chain. Equal attention should be accorded to power generation and supply. The government must upscale very substantially, the amount of megawatts of electricity generated and supplied to meet the country’s electricity needs. The partial removal of subsidy on electricity for those branded as Band ‘A’ should free resources for the completion of the power plants envisaged to give a quantum leap to power generation.

  • New tariff: Discos get April 11 deadline to refund customers wrongly billed

    New tariff: Discos get April 11 deadline to refund customers wrongly billed

    • Ndume condemns electricity tariff hike

    Eleven  electricity distribution companies have been given  till April 11, 2024, to refund customers wrongly billed at the new rate.

    The Nigerian Electricity Regulatory Commission (NERC) gave the directive in a document signed by Mr Abba Terab, the DGM, Market Competition and Rates for the commission.

    The refund, NERC said, should be through energy tokens no later than April 11, and file evidence of compliance with the commission by April 12.

    It also directed all Electricity Distribution Companies to provide as much clarity as possible to all affected customers.

    The DisCos are hereby directed to implement the following updates;

    1. All DisCos shall ensure that only the newly approved Band A feeders listed in their April 2024 supplementary orders are maintained as band A for the purpose of vending to prepaid customers and billing for post paid customers on their networks.

    2. All DisCos are required to immediately post on their websites the schedule of approved Band A feeders that have been affected by the rate review.

    3. All DisCos shall set up a portal by 10th April 2024 on their website that allows all customers to check their current Bands by entering their meter or account numbers.

    4. All customers wrongly billed at the new rate should be refunded through energy tokens no later than Thursday 11th April 2024, and file evidence of compliance with the Commission by 12th April 2024.

    5. The Commission shall monitor compliance with the requirements listed above and shall continue to provide support to all stakeholders as required,” the document said.

    Meanwhile, the Chief Whip of the Senate, Senator Ali Ndume, yesterday rejected the recent hike in electricity tariff.

    The lawmaker, who represents Borno South in the upper legislative chamber, described the timing as wrong, maintaining that Nigerians were yet to recover from the removal of fuel subsidy.

    The Federal Government, through the Nigerian Electricity Regulatory Commission (NERC), recently approved a 300 per cent tariff increase for Band A customers, allowing power distribution companies to raise electricity prices for city dwellers from N66 to N225 per kilowatt/hour with effect from April 1, 2024.

    Ndume in a statement condemned the move and called on the Federal Government to reconsider its position in the interest of Nigerians.

    He said Nigerians are facing many challenges, including unprecedented inflation, poor purchasing power, insecurity, and other hardship.

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    The former leader of the Senate said the Federal Government should focus on providing stable electricity first to Nigerians, reduce the inflation, stabilise the naira, reduce food prices, and provide other basic amenities to Nigerians before increasing the tariff.

    The lawmaker also wondered why such an important decision was taken without necessary consultation with the National Assembly as representatives of the people.

    Ndume said lawmakers’ constituents are also reaching out to them to intervene and reverse the astronomical increase.

    Already, critical stakeholders in the country like labour unions, ethnic and religious leaders, have also rejected the arbitrary hike and have warned of the dire consequences that may result from it.

    Ndume said: “The news of the (electricity tariff) increment came to me and many of my colleagues as a shock. It also came at a time when the National Assembly is on a break. Personally, I think the timing of this hike is very wrong. Nigerians are grappling with many challenges.

    “To put this fresh responsibility on them is very unfair. Nigerians are yet to recover from the fuel subsidy removal of last year. Many Nigerians are still grappling with the ripple effects that the removal had on them. To now come up with this is wrong.

    “I believe that the timing is wrong. There ought to have been some consultations, especially with the National Assembly as representatives of the people. We were not consulted. We saw the news like every other Nigerian.

    “The inflation is still very high. The prices of food commodities, drugs, transportation, school fees, and other daily expenditures are still on the high side. To now add this new burden is unfair.

    “The minimum wage has not been increased. Many state governments are yet to even pay the current minimum wage of N30,000. How do we expect the people to survive? We’ve to be very realistic and feel the pulse of the people we represent as a government.

    “For me, I think the Federal Government should first of all provide stable electricity, reduce the inflation, stabilise the naira, and prices of food commodities. Then, the purchasing power of Nigerians must significantly improve before we can place a fresh responsibility on them as a government.

    “The federal government needs to give the National Assembly the opportunity to also step in and consult because we represent the people. We feel their pulse, and we know what they’re going through right now.”

  • Power outage: Fed Govt insist DisCos must  recapitalise for efficiency

    Power outage: Fed Govt insist DisCos must  recapitalise for efficiency

    Determined to tackle the erratic power situation in the country, the Federal Government yesterday hinted that it may compel Distribution Companies (Discos) to capitalise in order to further drive investment in their infrastructure.

    This was revealed by the Minister of Power, Chief Adebayo Adelabu yesterday during his working visit to the Corporate Headquarters of Ikeja Electric (IE), in Lagos. Adelabu said this position may be put in place because investments across the Discos were low due to unavailability of funds to carry out infrastructure upgrade.

    Urging the DisCos to improve on their service delivery level to enable them be justified for tariff increase agitation, said: “we will deploy all we have to ensure improved power supply. We will use moral suasion to get the Discos to improve on their investment in infrastructure for better electricity supply but if this fails, then we will use legislation to get them to invest  by way of capitalisation.”

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    Adelabu said it remained worrisome that the country with an installed capacity of 13,000MW was generating a paltry 5,000MW, and assured that government will do all it can to ensure that Discos up their game through massive investment in infrastructure adding that all hands must be on deck among all operators within the power sector value chain.

    He said that going forward, the Federal Government will change the strategy using a top to bottom approach to change the electricity supply story in the country for the better..

    ‘’Going forward, efforts will now be concentrated on development and infrastructure upgrade from Discos to Gencos and then transmission. If we get it right at the DisCo level, then we are most certain that we are almost getting there,’’ the Minister said.

  • Minister, DisCos differ over cause of outages in homes, offices

    Minister, DisCos differ over cause of outages in homes, offices

    Minister of Power Adebyo Adelabu and Electricity Distribution Companies (DisCos) gave divergent reasons for continuous power outages in homes and offices.

    While the minister said it is due to negligence, DisCos blame it all on low generation.

    Adelabu urged the Transmission Company of Nigeria (TCN) and DisCos to improve power supply to consumers.

    He wondered why power supply which was stable in December suddenly dipped.

    According to him, negligence and not sabotage of equipment is responsible for outages.

    He spoke after meeting with officials of TCN, Abuja Electricity Distribution Company (AEDC) and Ibadan Electricity Distribution Company (IBEDC).

    “It seems you people have not bought into the (prescribed) solutions. November/December power supply improved across the nation that we were celebrating.

    “We entered the year, everything changed. It is not sabotage but sheer negligence,” Baba  Mustafa,  the ministry’s Director of Distribution, quoted   the minister as saying.

      Adelabu, according to Mustafa, challenged them  to identify what led to the decline in power supply  and to  take advantage of low hanging fruits in their franchise areas to improve distribution in the next few weeks.

    “At the meeting, we   identified the low-hanging fruits that when  utilised    can lead to  improved power supply.     The DisCos, especially, have agreed to take advantage of them (hanging fruits)   to improve power supply in the next couple of weeks.

     “We have been given a marching order. And those problems that jeopardise the supply of power, especially  in Abuja or reduce the supply  will be addressed. People will see an improvement.”

    IBEDC Chief Executive Officer  Kingsley Achife  said his   firm  and the AEDC gave  themselves about three to six months to identify the easiest ways in the areas to deliver power to the customers.

    He said: “ We have given ourselves a timeline of about a quarter: three to six months for each person to bring up the low hanging fruits in his areas and solve it and then work cooperatively with them to ensure there is seamless flow of customers in those areas, especially the areas which the complaints are coming from.”

    Achife  pointed out   that   low generation had been responsible for  the outages currently been experienced by consumers.

    He said the only  way to address the challenge  was for the DisCos to  work in partnership with the  TCN.

     He added: “We have had a candid discussion and look without blaming anybody for the various challenges we have in our networks.

    “ And from these challenges,  we have been able to reach one conclusion. One way to solve it is to work together in partnership with our TCN partner, which is the main institution that gives us most of the power to distribute.

    “We  have looked at the areas where there have been issues and the problem they cause our customers .

    “And of course, there is also the question of the challenge of the amount of power that is released in the system which has affected our expectation.”

    Also, AEDC Acting Managing Director Victor Ojelani said they explained to Adelabu that the  drop in supply from January this year was   beyond their control.

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    Ojelani said they informed the minister that low generation was accountable for their reduced supply to customers.

    The AEDC boss cited instances of  allocation that was 588MW in December.

    He said his company’s allocation that would have been 611MW in line with the January 2024 Multi -Year Tariff Order (MYTO) dipped to 561MW with a shortfall of 50MW.

    Ojelani added that last month, there was a   deficit of 147MW as only 464MW was allocated to the firm.

    He  said: “During the meeting we were able to explain to the minister what has caused the sudden drop in supply by us which is beyond us. Those were explained generally by low generation, which necessitated low allocation to the AEDC and IBEDC.

    “We gave statistics. For instance, for AEDC 2024 Allocation MYTO MW 611. In January I got 561. There is a deficit of 50MW. This was worsened in February, I got 464MW which gave a shortfall of 147MW. That is not available for our customers.”

    He however noted that the TCN was  already working to address the constraints from its own end.

    According to him, the minister assured them  that   the Federal Government was working hard to bridge the metering gap in the Nigerian Electricity Supply Industry (NESI) soon.

    Ojelani said there is also the plan by the government for each DisCo to identify vulnerable areas, where it needs government to intervene so that it  can provide transformers free of charge to the DisCos on behalf of the citizenry.

    He said the minister wants all the value chain to work together for progress in the industry.

     Ojelani said: “From the DisCos side we will address any issue that comes up. From the TCN, you heard him speak yesterday, generation will be increased to 6,000MW within a short period.

    “So, the TCN is ready to receive it. The DisCos are ready to evacuate it and put smile on our customers. Very soon the narrative will change and we will put smile on our customers.”