Nigeria: GenCos May Halt Operations over Administrative Charge

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Egbin Power Plant

Power generation companies are considering declaring a force majeure by halting the production of electricity nationwide.

According to them, the force majeure may take effect soon following the recent introduction of an unregulated administrative charge placed on Gencos by the Nigerian Bulk Electricity Trading company.

NBET is an agency of the Federal Government that buys electricity in bulk from Gencos through Power Purchase Agreements and sells to distribution companies through vesting contracts for onward supply to final consumers.

It was gathered on Sunday that NBET had slammed a 0.75 per cent unregulated administrative charge on thermal power generators for every gas transaction which the agency would be  involved in with the Gencos.

Power generators stated that the agency made it mandatory that thermal Gencos would not be paid their energy invoices unless they agreed to pay the administrative charge going forward.

Speaking on behalf of the Gencos through the Association of Power Generation Companies, an umbrellas body for the power firms, the Executive Secretary, Joy Ogaji, told journalists in Abuja that Gencos would have no option but to quit if this issue was not addressed.

She said, “If  the relationship between the Gencos and other market participants and agencies of government which is progressively becoming a master-slave or master-servant relationship is not addressed quickly, the time may just be right for Gencos to declare force majeure and relieve themselves of all market obligations, for which Gencos cannot be held accountable.”

Providing further explanation on some of the directives of NBET to the Gencos, Ogaji said the agency stated that the Gencos would not access the proposed N600bn which the Federal Government planned to release to the sector if they failed to agree on the administrative charge.

She said, “To access this fund, again, Gencos are faced with bullish behaviour from an agency that is supposed to be an agent representing/protecting their interest.”

When contacted by our correspondent to comment on what the Gencos said and the possibility of a force majeure by the power generators, the Managing Director, NBET, Marilyn Amobi, said she was not aware of plans by the Gencos to halt operations.

Authored By: Okechukwu Nnodim

SOURCE: PUNCH

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