Business Hilights
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Discos void Minister’s comments, accuse him of distortion of industry facts

Following last week’s revelations by the Minister of Power, Works and Housing, Mr. Babatunde Fashola that key part of 11 Discos deal when PHCN was unbundled was the provision of meters to consumers’, the Executive Director, Research and Advocacy, Association of Nigerian Electricity Distributors (ANED), Sunday Oduntan has reacted, saying the provision was not exclusive after all.

In a 28-page document released in Abuja by the group, the Discos responded directly to about 14 issues raised by the minister saying “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 privatization”.

According to ANED, “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.”

The group further averred 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.

ANED refutal reads in parts “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.”

“Besides, 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.

Continuing, ANED argued that “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.”

“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.

“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.”

While deny 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, ANED stressed that “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.”

“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.”

“In simple terms, the TCN has not wheeled energy in excess of 4,265MW ever,” the ANED disclosed.

According to the group, “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”.

Business Hilights recalls that earlier in the week, the Bureau of Public Enterprises (BPE) told members of the House of Representatives that most of the Discos were technically insolvent.

Alex Okoh, BPE Director-General, had addressed lawmakers at an interactive session held by the House Committee on Power.