‘You’ve failed,’ FG blasts DisCos as NERC directs tariff hike April 1

* No more subsidies for DisCos, FEC to determine capabilities, fate ─Minister

Isola Moses | ConsumerConnect

Perhaps displeased by the apparent failure of the 11 electricity Distribution Companies (DisCos) to deliver on their mandate to ensure regular power supply to Nigerian homes and businesses, the Federal Government, Wednesday, declared that the DisCos have failed in distributing power in the country.

The Government also declared that it would no longer subsidise them, noting that despite doling out about N1.7trillion to the companies in three years, they were only able to distribute 3,000MW out of about 10,000MW power generated.

Saleh Mamman, Honourable Minister for Power, disclosed this at the end of the Federal Executive Council (FEC) weekly meeting which President Muhammadu Buhari chaired.

Mamman, with his colleagues from Ministries of Information and Culture, Water Resources, Industry Trade and Investment, explained to the press that while the DisCos were collecting the 3,000MW, they were only paying for 1,000MW.

He said the DisCos must show that they have the capacity to distribute power to Nigerians, or surrender for more competent companies to be engaged.

The government cannot continue to subsidise the companies without commensurate results.

ConsumerConnect recalls that Nasir el-Rufai, Governor of Kaduna State, at the end of the National Economic Council (NEC) meeting in January 2020, had disclosed that the Federal Government actually spent N1.7trillion on electricity in the last three years.

“The Federal Government has supported the electricity sector with N1.7 trillion in the last three years and this is not sustainable. So, solutions must be found.

“Those solutions are not going to be nice. They may be painful, but the only way to solve the structural problems in the industry is to take some very difficult decisions,” Governor el-Rufai had said at the time.

The Power Minister said: “We presented achievements right from the day we took the oath of office to date.

“We want to tell Nigerians what we achieved in the value chains. Nigeria can generate up to 13,000 megawatts of electricity, but we cannot transmit all.

“So today, we presented to the Council the solution to the problem of our generation. It is mainly distribution.

“We can transmit, we can generate 13,000 megawatts, we transmit 7,000 megawatts but can only distribute 3,000.

“There is a lot of work to be done in transmission companies and the government is now willing to take up the matter immediately,” he declared.

On what the FEC has revolved to do going forward, Mamman said: “What I want to say is that most of the problem we are facing in this country that we cannot get electricity supplied adequately and efficiently is because we have a problem in distribution.

“Generation, no more problem. We can generate up to 13,006 megawatts but the transmission, those who are taking the electricity supply can only take 7,000 megawatts, even at that they are not taking the whole 7,000 megawatts but only 4,500 megawatts and then send to distribution, the distribution, in turn, receives only 3,000 megawatts.

“Because of the technical and commercial reasons, they cannot contain the whole power that has been generated.

“So, we have to correct the infrastructure. That is why I said that today, I submitted my observation to council and I believe the government is on it.

“One of the things I will tell you is that government has signed a memorandum of understanding with the German company, Siemen. They are to align between distribution and transmission and also generation.

“So that at the end of the day if we generate 13,000 megawatts, transmission will take the whole 13,000 and will distribute the same, that way Nigerians will be happy and everyone will have 24/7 electricity supply.”

On what will become of the DisCos, Mamman said: “The DisCos are the ones manning the distribution, that is why I have submitted my observations to the government; it is left for the government to decide.

“We just have to sit and see whether they are capable of – if they have the know-how because most of the problems we are having today are technical loss and commercial loss.

“They will give you power and may not collect your money or they will collect the money and pocket it, or they may send power and you may not have good sub-station that may collect this power and distribute it to customers.

“This has been our major problem and it is the responsibility of the DisCos to take care of that end.”

Meanwhile, Nigerian Electricity Regulatory Commission (NERC) again, has directed the 11 DisCos to jack up tariffs by average of 50 percent beginning from April 1.

Subsequently Ikeja Electric (IE) Plc, in its memo to the Commission also has noted that the directive is “in order to meet the tariff shortfall funding target from 2020 by the Federal Government of Nigeria.”

Owing to the directive, the 50 percent tariff increase is expected to raise the average tariffs from the current level of 27.30 N/kWh to 40.95 N/kWh, according to Anthony Youdeowei, Chief Executive Officer (CEO) of Ikeja Electric Plc.

The Nation reports it sighted the memo dated February 12, in Abuja, Monday.

The IE document said: “The objective for the extraordinary tariff review of MYTO-2015 is to ensure Ikeja Electric adjusts its tariff in line with the commission’s directive that current average allowed tariff shall be grossed-up 50% from April 2020.”

IE informed the Commission that in line with the directive “we have designed the tariffs based on the MYTO tariff model contained in the document, ‘Ikeja DisCo Tariff Model Jan 2020’ shared with IE by the Commission.

Kindly Share This Story