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Tag: Nigeria Electricity Regulatory Commission

  • Fed Govt gives conditions for electricity tariff hike

    The Minister of Power,Works and Housing,Babatunde Fashola and the Chairman, Nigeria Electricity Regulatory Commission (NERC), Prof. James Momoh, yesterday gave conditions that must be met before there can be any electricity tariff hike.

    Fashola who gave the score card of his three years in office in Abuja, said the consumers of electricity must experience efficiency in supply before there can be any hike.

    The minister said “there are dynamics for tariff. Tariff review does not mean that it must necessary go up. It could come to a time when it will come down.” He said there was already a deluge of complaints about cut-throat estimated billing.

    The minister said in his three years in office, power generation has increased from 4000megawatts (Mw) to 7,000Mw.

    He said transmission has increased from 5,000Mw to 8,000Mw, while generation has improved from 3,609Mw to 5,222Mw and distribution has improved from 2,690Mw to a peak of 5,222Mw early this year.

    Fashola said before there can be any increase in tariff, it would only be fair to put machines in place to be able to measure units of consumption, saying if the tariff is high and the consumers have the meters for measuring their consumption, they could switch off their appliances.

    “We are saying from the ministry that it is fair to allow more meter coverage before we talk of unit cost,” he averred.

    With regard to power, Fashola asserted that generation, which was at 4,000 MW in when he took over in the Ministry in 2015 has increased to 7,000 MW and transmission from 5,000 MW in 2015 to 7,000 MW while distribution has increased from 2,690 MW to 5,222 MW adding that although the work was clearly not finished, the Ministry was still in the process of delivering additional power to the grid.

    According to him, the additional 215MW would come from the Kaduna Power Plant while 240MW would come from Afam IV, 40 MW from Kashimbila, 30 MW from Gurara, 29 MW from Dadin Kowa and a total of 3,750 MW from two big Hydro power plants in Zungeru (700MW) and Mambilla (3,050MW) while power is also programmed for nine universities and 15 markets across the country.

    He said while distribution is being boosted through over 100 injection sub-stations, a distribution expansion programme to be funded by the Federal Government was now in an advanced state of procurement, adding that although there are still people yet to be reached and challenges due to disruptions from time to time and people who also needed meters, “it is indisputable that we have delivered on incremental power”.

    “The evidence of our progress is not only captured in the last quarter of the National Bureau of Statistics (NBS) Report for Q2 of 2018 which shows a growth of 7.5 per cent in the electricity sector”, the Minister said adding that previous quarterly reports from 2017 had consistently recorded growth, which, he noted “is a clear departure from 2014-2015 and proof of change”.

    He said  there has to be an enumeration of the number of customers in the market  since “you cannot increase electricity without knowing the number of customers.”

    Momoh added that there must be a determination  and minimisation of commercial and technical losses in the system prior to any tariff increase. This, according to him, will control the charge of customers for lost power.

    “We cannot leave the present tariff force until we determine that we are metered properly,” he said.

    The NERC chairman had earlier said metering will eliminate estimated billing, adding that “there will be a cap for a maximum payment for estimated billing.”

    Also speaking, the Permanent Secretary, Power, Dr. Louis Edozein, said although there is need for tariff increase, it cannot be effected without increase in power.

    He said the injection substations are not yet adequate, adding that upon the realisation of the challenges that the  electricity Distribution Companies (DisCos) were recording which led to their low demand for power, there was a lot of investment that the power firms would have made that they were yet to make.

    He however said there is already a distribution expansion programme that the government is carrying out to enable the companies absorb more energy and distribute to consumers.

     

  • Protecting electricity consumers’right under the law

    On May 15, last year, the Nigeria Electricity Regulatory Commission (NERC) announced that it had received directives from the Minister of Power, Works and Housing Mr Babatunde Fashola, declaring categories of eligible customers pursuant to Section 27 of the Electric Power Sector Reform Act 2005 (EPSR).

    This announcement has received applause in some quarters as the panacea to the lingering power problems in the country.

    The substance of the Minister’s declaration is to the effect that certain categories of consumers were now free to purchase power directly from the generation companies without going through the distribution companies. The classes of eligible consumers are listed below:

    • A group of end-user customers registered with NERC with monthly consumption above 2MW and connected to a metered 11KV or 33KV delivery point on the distribution network of an electricity distribution company;
    • End-user customers with monthly consumption above 2MW and connected at 132KV or 330KV on the transmission network;
    • End-user customers with consumption above 2MW and connected at 33KV on the transmission network;
    • End-user customers with consumption above 2MW and who are located near a GENCO or generation facility.

    The purpose of the directive as explained in the NERC advertorial is that it “is expected to bring into play new and stranded generation capacities which may be contracted between generation companies and eligible customers”.

    There are several issues that arise from this policy directive. What is it intended to achieve? How will it help resolve the problems currently facing the power sector? Does this enable the creation of an electricity market or only does it help to destabilise it?

    The EPSR Act has over the years been bedeviled with misinterpretation of some of the core concepts of the Reform leading to unintended outcomes that have generally impeded the success of the reform programme. The premature declaration of eligible customers once more showcases this problem. Before I go into the details, there are some questions that are burning for an answer.

    1. Did the policymakers acquaint themselves with the market design and structure before making this declaration?
    2. Did anyone reference the Power Policy document in other to understand the intendment of section 27 of EPSR?
    3. Were Sections 24, 25 and 26 of the EPSR Act reviewed or considered before the directivewas issued?
    4. What is the purpose of declaring eligible customers?

    The Nigerian Electricity Supply Industry (NESI)was designed as a three-stage market comprising the Transitional Market, Medium Term and Long Term. The differentiation of the market stages is tied to the level of development of the wholesale electricity market.

    Transitional stage

    The Transitional Stage is characterised mainly as competition for the Market (competition in the procurement or entry of new generation). The Electricity Market is open to competition for new generation entry and dispatch.  Optionally, some large customers connected directly to transmission may be authorised by the Electricity Regulatory Commission (NERC) as Eligible Customers that can buy in the Electricity Market.

    Medium Term stage

    The Electricity Market is opened to full wholesale competition with both competition to enter the market and in the market.  The number of Eligible Customers gradually increases, as authorised by the Electricity Regulatory Commission (NERC).

    Long-Term stage

    The Electricity Market is opened to full wholesale competition and retail competition.

    From the market design, the only competition to be introduced at the transition stage is competition to enter. It means that at the generation level of the business, competitive procurement of power will be introduced. Even though eligibility is an option under this stage, it would only be allowed for persons directly connected to the transmission system.

    The reality is that currently, NERC has been unable to even meet the criteria for a transition market. The market and NERC have not achieved competitive procurement of generation. If the first level of competition has proved impossible for the market and NERC to achieve, it is difficult to understand the desire and motivation for jumping to eligibility that is designed for the second stage of market development.

    What is evident from this faux pas is that the market design documents were not consulted nor did anyone seek counsel from those with historical knowledge of the electric power sector reform in Nigeria. It is unnatural to feel your way through when there exists documentation to guide you.

    I have also noticed that it would appear that those who urged the Minister to make this policy did not read Sections 24, 25 & 26 of the EPSR Act, but instead confined themselves to the provision of Section 27.

    For ease of understanding, I will reproduce the relevant portions of Section 24 of the Act;-

    “Until such time the Minister has made a declaration in accordance with subsection 3 of this section the commission shall prepare each year a report for the Minister as to the potential for competition in the Nigerian electricity supply industry and these reports shall present the Commissions analysis and recommendations as to whether the Nigerian electricity supply industry has developed to the point where a more competitive market ought to be established under section 26 having regard to:

    (a) The degree of privatisation that has occurred;

    (b) The existence of a sufficiently large number of potential competitive entities so as to avoid likelihood of an abusive market power; and

    (c) The existence of other preconditions, including the necessary metering and information technology infrastructures, required for the operation of a more competitive electricity market.

    The Minister shall present to the President and the National Council on privatization and the National Assembly each report submitted by the commission under subsection (2) of this section and when the Minister, in consultation with the President  and National Council on Privatisation is satisfied that the electricity market in Nigeria has developed to the point where a more competitive market ought to be established pursuant to section 26 of this Act, having regard to the criteria described in paragraphs (a) (b) and (c) of subsection 2 of this section, the Minister shall issue a declaration that a more competitive market is to be initiated.”

    The critical points to be taken from these provisions are;

    • NERC ought to be providing an annual report on competition, which to the best of my knowledge they have not done to date;
    • The Minister ought to be guided on market development by NERC not the other way round;
    • A more competitive market requires certain pre-conditions to be met;
    • The Minister’s actions and directives in relation to market competition must be taken in consultation with NCP and the President (and there is no indication that either the NCP or the President have been consulted on this).

    Further, one of the critical factors to be considered in moving to a more competitive market as explained in the Electric Power Policy 2001 is that conditions in Para 4.4 have been met and then competition can be introduced without threatening the financial viability of the main participants in the system.

    It is easy to assume that neither the Minister nor NERC was acquainted with the market design and therefore they were easily misled on the appropriateness of declaring this level of eligibility in the Transitional Stage of market development.

    The Minister’s actions are in reality a declaration of a more competitive market without even meeting the conditions of operating the transitional market. The policy document on eligible customers does not say what benefit is accruable to the industry or consumers from this policy save for the scant reference to stranded and new generation.

    The concept of eligible customers was introduced in the industry design as part of competition-enhancing mechanisms when the market had reached a certain level of maturity.

    Eligibility does not reduce market illiquidity nor does it cure payment delinquency. It does not improve the transmission system nor does it improve the financial viability of distribution companies. Indeed if the declaration is anything to go by, the eligible customer will have to rely on the transmission system and distribution network that has been found inadequate to ‘Bluetooth’ its eligible power to it.

    NERC and the Minister have failed to consider that electricity distribution is a volumetric business and the end user tariffs in the sector are currently being subsidised by the class of consumers it has boldly declared eligible. Neither the government nor NERC has demonstrated an appetite to allow the tariffs free float to cost reflective levels. It remains to be disclosed who will pay the differentials that will occur if these class of consumers are indeed removed from the revenue base of DISCOs.

    Despite my reservations about the declaration of eligibility at this stage, it would have served the industry better if the Minister had confined the category he opted to make eligible to that referenced in the market design for this stage, i.e. consumers directly connected to the transmission grid. As unnecessary as this may be at this stage, it would at least not distort the market design.

    Weakening the distribution companies by removing the easier to serve customers does not in any way address the problems that have hindered improved power supply in Nigeria. The ‘cherry-picking’ policy currently being pursued is at first glance only one of the many acts that point to outcomes that will benefit private interests to the detriment of the national interest. Investments will not come to the industry as long as the market returns remain in the negative because of government’s inability to provide sustainable regulations. By looking for quick-fixes, the policymakers only succeeded in introducing more volatility into an already volatile industry’s revenue and operating environment.

    The solution to challenges being faced by consumers and operators are well known. The current approach by the ministry and the regulator that has been subjugated by it only symbolises an ostrich solution.

    It is incredible that since writing this, the Ministry of power has come out with even more destructive policy directions. I will comment on them later.

    • Ojukwu is a Utility Regulation Specialist.

  • Fashola to DisCos: Be competitive or quit

    ...insists on metering before tariff increase

    …directs NERC towards eliminating estimated billing

    …orders commission to ensure evacuation of stranded 2,000mw 

    The Minister of Power Works and Housing, Babatunde Fashola on Monday advised the electricity distribution companies otherwise known as DisCos to compete to deliver power to customers or exit the electricity market for investors that are ready to satisfy consumers. 

    He directed the Nigeria Electricity Regulatory Commission (NERC) to work toward eliminating estimated billings. 

    Fashola said supposing he had his way, he would have directed that estimated billing regime terminates immediately, but the local capacity is not enough to bridge the metering gap in the market.

    The minister, who made this disclosure in a press briefing at Abuja, said complaints coming to government about meters, estimated billings and mass disconnections, where not everybody is owing cannot continue. 

    He said that “government must act. DisCos bought these assets with their eyes wide open and they must compete to deliver or exit.”

    Fashola directed NERC to (a) ensure that the DisCos improve on their distribution of equipment and capacity to take up the available 2,000mw in order to optimize the use of electrical resources produced by the GenCos. 

    He mandated NERC to “enforce the contracts of the Discos to supply meters, and act to ensure the speedy installation of meters with a view to eliminate estimated billings and promote efficient industry and market structure.

    “to stop the DisCos from preventing entrepreneurs from entering the market to supply the consumers whom the DisCos cannot yet supply and to license such persons subject to terms and conditions in order to promote competition and private sector participation and avoid a private monopoly in the market.”

    Read Also: Fashola calls for investment in education, others

    He said that it is neither his intention nor that of government to take over the investors’ business, but the government desires to see the firms flourish in a competitive environment. 

    Government will however find a solution whenever the DisCos are inefficient and not ready to improve, he said. 

    He lamented that even where DisCos installed 10,000, about 8,000 were bypassed within weeks after installation. 

    Fashola ruled out the possibility of increasing tariff without adequate provision of meters, noting that metering is a condition precedent to tariff review. 

    Expressing his opinion in favour of tariff increase, the minister countered himself on the issue, stressing that “after that tariff increase why should we increase tariff without meters.”

    He said for the customers to pay the correct tariff for the power they consume, the suppliers have to defray the distrust by first providing meters for consumers to know what they are paying for.

    Asked by the directive if his statement that the DisCos should compete or quit is a direct invocation of revocation the privatization to the inefficient private investor, the Permanent Secretary, Dr. Louis Edozien explained that the eligible customers regulation is a means of getting the customers who are not satisfied with the service they are getting from the  DisCos to buy their power directly from the GenCos. Secondly, that the DisCos should not refuse unsatisfied customers from going to get power.”

    He however noted that upon the realization that they have nothing to lose from the eligible customers policy, the distribution firms have started complying with the pitch reluctantly.

    The NERC chairman, Prof. James Momoh, whom the minister asked to inform the public when the Metering Asset Providers licensees would start providing the meters, said that the meter manufacturing companies in Lagos are ready to roll them out.

    As Fashola insisted that the chairman informed Nigerians on when the installation would begin, he mandated Momoh to after the briefing present to him, a report on the number of licensed companies for meter provision, the DisCos they are working with and the areas they are supplying meters to. 

    Momoh said that over 50 firms have been licensed to supply meters. 

    The minister, who asked the Permanent Secretary to take note of the directive, said that the customers should know when meters are delivered to their areas for them to make relevant arrangements. 

    On billing, according to Momoh, NERC has put together a prepaid market for which customers can decide which power they want to use and for the appropriate rate to be paid for.”

    He added that that with the investment in metering NERC will be able to eliminate estimated billings for people to pay their appropriate cost. The commission, he said, is working hard in the area of customer enumeration in order to avoid a foul play on the customers by the DisCos.

    He said that NERC is putting in place penalties to ensure that the DisCos abide by the rules and regulations.

  • NERC to increase electricity tariff

    Nigeria Electricity Regulatory Commission (NERC) Chairman Prof. James Momoh yesterday vowed to review the prevailing electricity tariff.

    Speaking with reporters after the Minister of Power, Works and Housing, Babatunde Fashola inaugurated him in Abuja, he said the commission would look into the computation of the tariff.

    He said: “The tariff is not a challenge you cannot solve. It happened, you learnt something about it last week. You don’t have to relearn the same lesson today.

    “You should be able to ask question–what are we going to do tomorrow to avoid the problem?. There is what you call data science in the new thinking of the world, where we collect data, you learn from the information and you predict the future. So if we don’t do that, we are wasting our time. Because you know it is going to rain tomorrow so you get your umbrella. You don’t wait until it rains before you go by umbrella.”

    Momoh added: “We have no choice; we have to look at what computes a tariff. Tariff is not a guesswork. There is a calculation you do to get there.”

    He said he believed in team work for quick wins, adding that some of the quick wins should be what the commission could do in terms of estimated billings and how to ensure that it gets enough data to convince customers to pay for the power they use.

    Momoh said: “If we remain the same, and we remain static, and we are not solving real problem, we will just be doing fire brigade promise. The GenCos will always tell you there is a blackout without knowing why.

    “You are going to ask question why. I know why, because I know the Mathematics behind it, I know the Physics behind it. I know also the Economics behind it. If we are able to teach people to know why things go wrong, perhaps, we learn from our mistakes,” he said.

    Momoh, who said the industry should anticipate problems, insisted that “we look back, we use lessons of yesterday to solve tomorrow’s problem.”

    Earlier, Fashola said observers would admit that power supply has increased since 2015, submitting that “without a doubt, we have increased generation to 7000Mw, increasing the transmission to over 7,000Mw, and increasing the distribution from 2,690 to average of 4,900 or 5,000.”

    He said the electricity market has a capacity of 2,000Mw that has been stranded, which the ministry is working to distribute before this year end.

    According to him, the NESI has a new stock of 459Mw underway from Azura that has notified him on the completion of its plant and its readiness to commence operation.

    Momoh said the sector is expecting another 240Mw from Afam and another 215Mw from Kaduna. Besides, he noted that the market is also expecting power from Kashimbilla, “but the distribution end is where our challenge lies.”

    Fashola said the mini-grid regulation has started yielding results, and the ministry is already seeing the impacts in the market.

    He said this year, markets such as Suru in Lagos, Sabon Gari  in Kano, Ariria  in Aba, and some other markets are going to be energised.

    Fashola noted that since the completion of the privatisation of the sector, the size of the ministry has shrunk from the previous staff strength of the 50,000 to less than 1,000.

  • Group protests Imo policies

    An organisation, the Imo Peoples Action for Democracy (IPAD) has kicked off a one-week peaceful demonstration against what it described as bad governance in the state.

    The rally tagged Occupy Imo began on December 18 in Owerri, the state capital.

    In a statement made available to Southeast Report, the coordinator of the group, Aku Obidinma said the rally was a response of the people to the increasing bad governance in the state which he said was now attaining its peak.

    The bad policies, he alleged, included lack of due process and respect for rule of law, waste of scarce resources on non-economically viable projects, refusal to fully pay workers’ salaries, pension arrears and gratuity to pensioners, issuance of dud cheques to pensioners, failure to account for the bailout funds, Paris refunds and other loans collected.

    Others are use of state fund and apparatus in conducting personal business, illegal demolitions and displacement of people resulting in loss of means of livelihood by thousands of Imolites even against restraining court orders, nepotism and familiocracy, unending grabbing of land using government powers and conversion of same to personal properties, refusal to conduct local government election and failure to account for the trillions of Naira  allocated to that tier of government for over six years, construction of poor quality infrastructure and increase of abandoned projects.

    He said the time and venue for the protest were chosen to ensure that the state government’s usual strategy of diverting attention of Christmas returnees away from the rot in governance through impressionist cosmetic beautification of the state was frustrated, believing the protest will keep the people conscious about their sufferings in the hands of the state government.

    He said Imo People’s Action for Democracy was a coalition of civil society groups, activists, faith-based groups, professional bodies and community-based organisations among others that stand up in defense of democracy.

    According to him, the coalition will continuously engage both the government and the citizens on good governance and democracy, adding it will, at all times, mobilise Imolites on lawful steps and actions to resist bad policies and actions of government.

    He called on Imo people irrespective of affiliations to come out in their numbers to collectively send the message to the government.

    The former Chairman, Nigeria Electricity Regulatory Commission (NERC), Sam Amadi, Charley Boy Oputa, Chidi Odinkalu, Festus Okoye, Ezenwa Nwangwu, Victoria Ibezim, Chido Onumah, Clement Nwankwo, Okechukwu Nwanguma, Wisdom Durueke, Louis Alozie, were expected to at the rally.

     

  • NLC names states not utilizing bail out funds

    NLC names states not utilizing bail out funds

    • Promise to resist any hike in tariff

    The Nigeria Labour Congress (NLC) on Tuesday made good its threat to name and shame states that have refused to pay the complete salaries of workers or make public the utilization of both the bailout funds and the Paris Club refund, saying ten out of the thirty-six states are particularly guilty of the offence.

    The Congress also warned the government against approving another increase in electricity tariff, saying it will mobilize its affiliates, social partners and other Nigerians to resist any further increase when Nigerians were yet to get quit service for the previous increase which has been declared illegal by the court.

    President of Congress, Comrade Ayuba Wabba who spoke at the National Executive Council meeting of the Non-Academic Staff Union of Educational and Associated Institutions (NASU) in Abuja said six of the ten states were in terrible situation, pointing out that the Congress has directed all states chapters whose members are owed more than three months salaries arrears to declare an industrial action.

    While reacting to President Muhammadu Buhari’s disappointment with the governors over the utilization of the funds made available to them, Wabba had told The Nation exclusively that the Congress was compiling a list of state governors that has failed to utilize the bailout fund and the Paris club refund for the purpose it was meant for.

    Wabba said: “Out of the 36 states, we have ten bad case scenario and out of this ten, we have six terrible ones. We have promised to name and shame them. Those states include Imo that has been paying workers salaries in percentage and has not declared utilization of the bailout fund and Paris club refund. It is part of the states that ICPC has mentioned in fund diversion.

    “They paid 40 percent pension to their pensioners without their consent and provided a form for them to sign under duress. That is not allowed in law. We have Bayelsa which has between five to ten months arrears, Ondo is owing between four and six, Ekiti, (five to eight), Benue (five to eight) and Kogi which is the worst case scenario. 

    “We have three categories of workers in Kogi. We have 40 percent that is being paid up to date, we have 25 percent that has not been paid between eight and sixteen months and another 25 percent that has not been paid between eight and twenty-one months. In all the sectors, they have categorized the workers into three categories. 

    “We also have the case of Osun which is also paying in percentage but are up to date. Ebonyi unilaterally, without discussion with the union tried to reduce the salaries by a certain percentage and have also not made available records of utilization of the Paris club refund. 

    “We have the case of Zamfara which is the only state that has not implemented the minimum wage and all attempt, (including agreements they have signed) to get them to make available records utilization of those funds have failed. The last one is Abia which has a problem with the parastatals. On the average, other states are above Board. 

    “As I speak to you, both Zamfara and Benue are on strike and I am aware that Kogi has issued notice which is in conformity with the decision we took at our last NEC meeting that any state with liability of more than three months should start an action and we will be there to support them.”

    Speaking on the statement credited to the Permanent Secretary in the Federal Ministry of Power that one of the problems in the power sector was low electricity tariff, Wabba said Nigerian workers will not accept any further increase in electricity tariff as it will mobilize to resist it.

    He said: “A few days ago, I received a letter from the Nigeria Electricity Regulatory Commission informing us that they want to hold town hall meetings where they want consumers and other stakeholders to contribute. What immediately came to my mind is an attempt again to increase tariff when we have not been able to get out of the one they illegally increased by 45 percent. 

    “The twin issue of fuel price increase and electricity tariff has made nonsense of the minimum wage. We have not been able to justify that 45 percent increase, but now, they are coming again. Let me say emphatically that NLC as an Organisation and all our affiliates will resist any attempt to increase the electricity tariff again. 

    “We have gone to court to challenge their action and the court mad a pronouncement that the process they followed to effect the last increase was illegal and therefore set it aside. Here we are. Even to respect that court order has become a problem. We must continue to respect the rule of law. We are still on that issue because no court of law has set aside that judgement. 

    “Let us warn those people again because, for them, they must continue to feast on us. If this happens, it means more industries will close and it also means more darkness because the more they increase the tariff, the more darkness we have and more burden on the Nigerian worker. Therefore, we must situate our policies within the context of how it can improve the lives of ordinary Nigerian.”

    Speaking of the current economic challenge facing the nation, he said “there is no doubt that our country is passing through very difficult challenge and I think those challenges are to strengthen us, give us hope and make us to think more and be able to respond to issues that affect us. Economies do bubble and burst. Therefore we must not be lamenting that we are in recession or getting out of recession. 

    “What matters is how do we put food on the table of the ordinary Nigerian; how do we drive our processes to ensure that industries are working? Once industries don’t work and we don’t produce but continue to import, the situation will continue because there will always crave for foreign exchange for us to import and because we don’t export anything, that issue will continue. 

    “Our focus must be that our economic model is anchored around the people and around the issues of social justice. Once we don’t do that, then the problem will continue. That is why we have continuously engaged the process including options that are going to work. 

    “For instance, the issue of taxation. It is only workers today that pays the correct tax while those that have more than enough, including those with stolen funds don’t pay tax. Why should you continue to overburden the worker that is already paying the correct tax with more taxation. 

    “If I am paying correct tax through pay as you earn if means that I am paying correct tax and to introduce more tax means double jeopardy. If we are able to access the stamp duty alone, we will be able to generate over two trillion Naira per annum. These are issues that we need to address. You cannot continue to rob the poor to make sure that the rich continue to live largely.”

    Earlier in his address, National President of NASU, Comrade Chris Ani said the current agitation for restructuring and fiscal federalism were attempts to divert attention from misgovernance and ineptitude the nation has been going through, adding that Nigerians should not be distracted by elements that have actively participated in the looting and mismanagement of our economy and can be found in the two major political parties. 

    Ani said what Nigeria workers need at this point in time is not whether more power should be given to states, but to know how they have managed the power at their disposal at the moment.

    While congratulating the Government and its relevant officials for bringing the country out of recession, Ani said the union will only join them in the celebration, when workers’ welfare improves; jobs are secured; salaries are paid in full as and when due; wage increase is de-frozen and other withheld benefits are paid.

  • GenCos to NERC: add stranded 2,000MW to capacity

    GenCos to NERC: add stranded 2,000MW to capacity

    The electricity Generation Companies (GenCos) on Monday urged the Nigeria Electricity Regulatory Commission (NERC) to classify the stranded 2,000Mega Watts as part of the available generation capacity in the Nigerian Electricity Supply Industry (NESI).

    The commission, according to its presentation on the review of the Multi-Year Tariff Order (MYTO) methodology by Senior Manager, Market and Rate, Abbah Tera, takes generation capacity as one of the criteria for review of tariff.

    Responding to the presentation, the Executive Secretary, Association of Power Generation Companies (APGC), Mrs. Joy Ogaji, said that that the stranded capacity is not utilized does not mean that it is not produced by the generation companies.

    She noted that there is enough gas but the only constraint its cost, stressing that the GenCos should not suffer owing to the stranded power. 

    Her words: “We are not saying we don’t have enough generation. The only constraint that Nigeria is having is the cost of gas. We have over 2,000MW sitting. The over 2,000Mw should be treated, it is available. GenCos should not suffer for it . In line with the review NERC should capture the stranded capacity.”

    Some of the stakeholders urged the commission to privatize the Transmission Company of Nigeria (TCN) since it is obvious that the Federal Government which operates has proven inefficient.

    The Commissioner of Engineering Performance and Monitoring, Prof. Frank Okafor, however explained that the cost of funding the transmission network is too enormous for a private company to raise for the operation of the system.

    “It will be difficult to get investors that will fund the TCN,” he submitted.

    Besides, he said that it might be difficult to secure the right of way for the network since it transverse so many states of the federation. 

    According to him, government is borrowing from multilateral financial agencies to expand the grid since the amount of power delivery is not sufficient to raise the required revenue.

    The commission maintained that it has met with the TCN and DisCos in order to deliver the stranded power to consumers.

    Owing to the appreciation of stranded generation, NERC said that Minister of Power, Works and Housing, Babatunde Fashola has directed it to sell power to eligible customers. 

    NERC however informed the stakeholders that it has already got the go ahead to enact a regulation that will encourage willing seller and willing buyer of electricity. 

    NERC Vice President pointed out that the event was not for a tariff increase but for the commission to get stakeholders’ inputs on (the frequency of the review) how often the review should be carried out. 

    The stakeholders were also divided on whether the tariff should be reviewed bi-annually, monthly or yearly.

    NERC carries out a major review tariff review every five years and minor review every six months. 

    But speaking representative of Mainstream Energy, Solutions Limited, Musa Abba Bajoga, asked the commission to following the global practice to “do what is done universally.”

    The President Hotel Owners Association of Nigeria, Dr. Ezeh Udeh told the commission to consider a yearly review since hotel rates are not reviewed monthly and that any price that rises in the country hardly falls. 

    Network of Electricity Consumers Advocacy of Nigeria (NECAN), Tommy Akingbogun, told the commission not to use its rate to kill investors. 

  • Only maximum demand customers exempted from bills – NERC

    Only maximum demand customers exempted from bills – NERC

    The Nigeria Electricity Regulatory Commission (NERC) on Tuesday said that the only customers exempted from estimated billing are those within the threshold of 45KVA consumption and above.

    According to a statement that Assistant General Manager Media, Mrs Vivian Mbonu issued in Abuja yesterday, the explanation further to the directives over the weekend on the verification and validation of the Maximum Demand (MD) electricity customers metering exercise.

    The statement noted that “the Commission wishes to clarify that the affected electricity customers are those within the threshold of 45kVA consumption and above. 

    The Directive to exempt MD customers from estimated bills was sequel to an earlier Directive of the Commission to the 11 Distribution Companies (DISCOs) to completely meter all their MD customers on or before 31st November 2016. However, the DISCOs sought for and were granted an extension to 1st March 2017.”

    The Commission directed over the weekend that no MD customer should henceforth be billed based on estimation to further validate the confirmation and assurance given by the DISCOs that all such customers are now metered.

    It was further directed that no “electricity distribution company shall disconnect any Maximum Demand electricity customer that was not metered by March 1, 2017, on the basis of the customer’s refusal to pay a bill issued after the compliance deadline on the basis of estimated billing methodology.”  

    Any maximum demand electricity customer so affected was also advised to promptly report any attempt to disconnect it on the basis of refusal to pay estimated bill issued after March 1, 2017, to the Commission.

    The underlying rationale to this directive is the effect that since this category of customers have been completely metered as directed by the Commission and reported by the DISCOs, no MD customer should be issued with estimated bills.

    For non-MD unmetered customers on their networks, electricity distribution companies have been warned to adhere strictly to the Commission’s approved estimation methodology in accordance with the Estimated Billing Methodology Regulation.

    Electricity customers are also advised to avail themselves of the Commission’s redress mechanism in instances of contested bills before seeking legal advice.  

  • Group kicks against proposed increase in electricity tariff

    Group kicks against proposed increase in electricity tariff

    A group, Citizens Access to Electricity Initiatives (CATEIN), on Tuesday kicked against planned increase in electricity tariff by the Nigeria Electricity Regulatory Commission (NERC).

    Mr Abdul-Salam Fashola, the Chairman of CATEIN told the News Agency of Nigeria (NAN) in Lagos that there were lots of issues to be addressed before tariff adjustment.

    He said that Distribution Companies (DISCOs) did not have complete data of their consumers.

    “Nigeria Electricity Regulatory Commission (NERC) should shelve the idea of increment first and address fundamental issues in power sector.

    “The investors in power sector should find a way to ensure they have proper data of their consumers.

    “There are lots of consumers that are enjoying power supply without paying a single kobo into their account because they are not captured.

    “Some pay regularly into their staff pocket, while many are tapping their energy to do their businesses without hindrance.

    “Many consumers refused to pay monthly bill because the bill is outrageous, some owe close to N250, 000 alone and DISCOs insisted that they have to pay all.

    “There is lots of injustice done by these people; a consumer travelled out of the country came back six months later, only to meet bills of N100, 000 without consuming power supply, how do you expect him to pay.

    “There are lots of bad or faulty transformers everywhere, overloaded cables and load shedding here and there. Some consumers in Ibafo and Mowe in Ogun State have not been connected to their system.

    “Many consumers are still battling with their analogue meter, some two years after NERC has commanded DISCOs to install them with free prepaid meters,” he said.

    He urged the DISCOs to address all these challenges before the idea of tariff could be raised.
    “We in CATEIN say no tariff adjustment until all these fundamental issues are addressed and consumers are enjoying regular power supply nationwide.

    “Put smile on the faces of your consumers before tariff adjustment because life is hard now,” he said.

    NAN recalls that Mr. Babatunde Raji Fashola (SAN), the Minister of Power, Works and Housing, at a news conference in Abuja on Dec. 8, said that electricity tariff will slightly go up.

    Fashola, however, said that the government would meet with the Nigeria Electricity Regulatory Commission (NERC) to ensure that consumers and investors were not cheated.