Distribution companies and the burden of electric power sector reform act


January 31, 2018 | 12:44 am
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The burden of electricity supply in Nigeria is such that while some Nigerians have no access to power, those who seem to have access to electricity are consistently battling with excruciating power interruptions.

A cursory look at the challenges points to the fact that the bulk of Nigeria’s problems’ on electricity is from the distribution companies (DisCos) and industry close watchers are of the views that it will be impossible to find a solution without a concrete efficient power sector system.

Experts that understand the sector maintain that Nigeria have reached its threshold, and power sector players must urgently cede some assets to enable new investors with expertise come in, so as to enable the sector function normally.

They expressly advocate for owners of distribution companies who have no capacity to finance their operations and power plants to transfer their equity to fresh investors, saying this will help a great deal in realising Nigeria’s objective of the steady power supply.

Wofai Samuel, a consultant in power, oil and gas sectors while commenting on the challenges facing the power sector in Nigeria at a recent interview opines that while electric power sector reform act gives DisCos an exclusive right of metering in the sector, it is important to streamline their operation alongside efficiency.

Samuel observes the DISCOs investment and policy vacuum are yet to be resolved issues in the sector

According to him, distribution companies paid a lot of money but there are issues of vandalisation of assets and dilapidation, as well as, technical issues including losses incurred from circuit breakers, transformers”.

Report indicates the constant dispute between electricity consumers and Electricity Distribution Companies over electricity tariffs. While electricity customers argue that it is unreasonable to pay for the power they do not enjoy, the DisCos claim that power can only be supplied when it is paid for.

Analysts in their various summations insist that the solution to this is the provision of pre-paid metering to consumers and for there to be a regulation that enables operators in different sectors to play different roles.

They are worried that the inadequate implementation of the multi tariff guideline is evident as a result of the fact that some power sector players are not very knowledgeable about the sector they also had little or no information whatsoever of the electricity market they were investing into.

Babatunde Fashola, Minister for Power, Works and Housing, recently stated that electricity tariffs have remained high because the regulatory body failed to review the tariffs as part of their oversight functions.

To analysts, this should not be so given that every government agency and institution, works around a political environment. By virtue of this fact, they take into cognizance, the body language of the political environment and respond to it accordingly.

According to industry watchers the Minister of Power supervises NERC and if there are policies or structural issues, he should rectify them. NERC is funded with money from taxpayers, thus if the institution you supervise has failed, you have concurrently slacked in your supervisory and leadership role.




January 31, 2018 | 12:44 am
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