By Energy Worth
Most of the statements made last week Monday by the Minister of Power, Works and Housing, Babatunde Fashola, about the power sector are false, according to the electricity distribution companies.
They said on Tuesday that comments made by the minister on metering, power generation and transmission capacities and stranded electricity, among others, were significantly distorted.
Fashola had briefed journalists on the status of Nigeria’s power sector at the headquarters of the Federal Ministry of Power, Works and Housing in Abuja last week and identified a lot of lapses on the part of the Discos.
But in a 28-page document released in Abuja on Tuesday, the Discos responded directly to about 14 issues raised by the minister and asserted that the ministry had consistently promoted policies that had resulted in sector-wide confusion, infringed on the responsibilities of the various sector players, imposed its agenda on the regulator, compromising its independence, created lack of respect for contracts as well as distorted and redefined the law of privatisation.
The 11 Discos, in a joint response to the minister, which was issued by the Executive Director, Research and Advocacy, Association of Nigerian Electricity Distributors, Sunday Oduntan, stated that “it is with much regret that we feel compelled to respond to the significantly distorted picture that has been painted of the electricity distribution companies by the minister in his press briefing.”
On the statement by Fashola that the Discos were responsible for the provision of meters, the power firms argued that at the 18th monthly power sector and stakeholders’ meeting on August 14, 2017, the minister stated that the supply of meters to electricity customers was not the exclusive to the Discos.
The firms stated, “This is a contradiction of his convenient assertion now that customers with no meters should turn to the Discos. The metering gap, a major concern for our customers and us, unfortunately, has become a politicised issue. As a means of tracking and accounting for our revenues, there is no greater interested party in comprehensive metering than the Discos.
“With the farming out of the responsibility of metering to third party vendors under the Meter Asset Provider regulation enacted by NERC, it is our hope that the challenges of estimated billing will be minimised for our customers over time.”
The Discos argued that it was odd for the minister to say power distributors were responsible for the proliferation of estimated bills, as they noted that they were working with NERC to improve the accuracy of the estimated billing methodology for better customer satisfaction.
On Fashola’s statement that no Disco was buying power directly from the any generation company, the distributors stated that in an environment of significantly limited supply, the determination that the Discos were unwilling to maximise the supply of electricity to their customers for some nefarious reasons was counter-intuitive.
They stated that the only product that the Discos were selling to make a revenue was electricity, and the only reason a Disco would not take more energy was due to the impact of the revenue shortfall in the industry, which limits the available capital available to invest to take the power.
They added, “To continue to prevent the Discos from receiving the allowable revenue needed to run the sector effectively and turn around and accuse them of not investing in the sector is disingenuous. This is, principally, the reason the Discos can’t contract directly with the Gencos.
“The minister’s position is inconsistent with the facts. Indeed, the various interferences in the past four years have simply created a continuous shifting of the goal post.”
They argued that the objective of the minister’s briefing was to demonise the Discos, who by the structure of the Nigeria electricity supply industry, were the faces of the difficult sector.
They said, “We are also left wondering whether such demonising of the Discos is a camouflage for the absence of the effective policy leadership that is desired for implementing the enabling environment that is necessary for the viability and sustainability of the NESI.
“We recognise that we are on the crux of a political season, in which all manner of advantage is being sought by political contenders and we, however, do not want to be used as the whipping dog to advance other people’s agenda.”
The Discos also faulted claims by the minister that Nigeria’s power generation capacity was about 7,000 megawatts and that the distributors were not taking about 2,000MW of the installed capacity.
They said, “We do not understand the constant references to the increase of generation capacity to 7,000MW from 4,000MW for the period of 2015 to 2018 that has been used as the basis of defining the Discos as incapable of taking on more power – the stranded 2,000MW.
“A review of NERC’s ‘Daily Energy Watch’ for January 28, 2015 would indicate a generation availability of 6,421MW (divided into peak of 4,230MW and constrained energy of 2,191MW). In other words, it is misleading to state that available generation has grown from 4,000MW in 2015, as a measure of progress, given that a volume of generation slightly under 7,000MW already or previously existed, prior to the beginning of this administration.”
The firms added, “Furthermore, there is no stranded 2,000MW. While there is an available capacity of 7,000MW, the best that can be generated, at this time, is 5,000MW. This is because there is insufficient gas to power the thermal plants due to gas line limitations (for instance, the non-completion of the Oben pipeline) and the absence of a commercial framework that would encourage gas exploration. Generation that is constrained by gas amounts to an average 1,500MW daily.”
They also faulted claims that the Transmission Company of Nigeria currently had capacity to wheel over 5,000MW, stressing that in spite of the TCN’s tested wheeling capacity of 5,500MW, with the two historical generation peaks of 5,074MW recorded on February 2, 2016, and 5,222MW on December 18, 2017, only 4,577MW and 4,265MW were wheeled or transmitted, respectively.
“In simple terms, the TCN has not wheeled energy in excess of 4,265MW ever,” the firms added.
On the assertion by the government on the reconciliation of some of the electricity debts that it owes, the Discos described this as troubling.
They said their position was in the light of the fact that the government continued to owe them for energy that it consumes, adding that the debt had continued to grow, “contributing to a market shortfall that is estimated to be in excess of N1.3tn on the Discos’ books.”
The Discos also stated that they had no clarity on the N37bn government metering initiative that the minister announced some months ago.
“The public needs to demand full transparency around the N37bn deal as the same is expected to be paid back by consumers and the Discos still do not understand the basis and fundamentals of this,” the firms added.
