Nigeria: Federal Government Stops Payment of GenCos Shortfall

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The Federal Government on Tuesday announced its exit from the payment of the shortfall for the 4000mega watts per hour (mwh) to the Electricity Generation Companies (GenCos).

According to the Permanent Secretary, Ministry of Power, Dr. Louis Edozein, who broke the news to stakeholders at the Nigerian Electricity Regulatory Commission (NERC) workshop on Eligible Customer Regulation in Abuja, the Electric Power Sector Act does not make provision for the Nigerian Bulk Electricity Trading Company (NBET) to pay for the shortfall to the GenCos.

He told the stakeholders that in line with the contractual agreements, it is the consumers, who should pay for the power they consume.

His words: “In addition to that 2,000 MW, the 4,000mwh that is consistently being delivered is not fully paid for. Government through the nation’s insurance Programme is paying the generation companies for any shortfall payment from NBET.

“Clearly that is not what act intends the industry to be. And ultimately government has to exit from this role.

“So, it is this regulation that will ensure that not just stranded power but delivered power, is delivered to consumers who are contractually bound to pay for it. And if they do not pay for it they do not enjoy the service.”

The Permanent Secretary noted that it is obvious that there is more generation than the consumers can pay for, noting that the solution is for the stakeholders to look for the customers that are not well served under the Eligible Customers Regulation to take it and pay for it for their benefits.

He submitted that “if we do this aggressively, that 2,000mw of so-called stranded generation will quickly evaporate.”

He told the stakeholders to look for customers to buy the stranded power because it is inappropriate for government to continue to pay for the power.

According to him, government cannot perpetually pay for their power consumption.

Edozein also told the Transmission Company of Nigeria (TCN) to stop the complaint about non-increase of tariff to the NERC and work with the GenCos to get willing customers to buy the available power.

He said that “I have a message also for TCN: stop complaining to NERC about your tariff. Your job is to satisfy your own customers that is GenCos and DisCos.

“Work with them as you have the money to find all customers using this policy who will take the power GenCos have, contract with GenCos at a tariff that you, the GenCos and customers agreed to transmit the power close to the customers. That is the way you will raise your revenue.”

The Permanent Secretary urged the DisCos to satisfy their customers in order to encourage them to pay for the service.

He explained to the DisCos that the reason the customers would want to take advantage of the eligible customer regulation is when they are not satisfied with the services rendered to them by the DisCos.

He said “So DisCos this is your opportunity to service your customers better. Listen to them when there is infrastructure challenge in getting the product to them.”

There was however a mild drama as the Deputy Managing Director, Ibadan Electricity Distribution Company, Engr. John Ayodele counted the Permanent Secretary on stranded 2,000MW.

He told the stakeholders that there is no stranded 2,000mw anywhere in the Nigerian Electricity Supply Industry (NESI) but the Executive Director, Mainstream Energy Solution Limited, Mr. Siraj Abdullahi, insisted that his company, Kainji Power Hydro habours some stranded power.

He challenged the stakeholders to come visiting the plant to observe the stranded power.

Authored By: John Ofikhenua

SOURCE: THE NATION

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