A Review of the Nigerian Energy Industry

Cost-reflective power tariff not possible in Nigeria now – BPE

Director-General-BPE-Mr-Benjamin-Dikki17 August 2014, Sweetcrude, Lagos – It is currently not possible to have a cost-effective tariff structure in the power sector, the Director General of the Bureau of Pubic Enterprises, BPE, Mr. Benjamin Dikki, has said.

Dikki made this disclosure in response to clamour by the new investors in the nation’s power sector for a hike in tariff that would give them increased earnings to compensate for the high cost of doing business in the sector.

The BPE boss, who stated this in Lagos while on post-privatisation visit to the Eko Electricity Distribution Company, maintained that a cost-reflective tariff might not be possible until a significant improvement in power supply had been attained.

He stressed that as much as the BPE and the Nigerian Electricity Regulatory Commission, NERC, would be willing to look into the possibility of having a cost-reflective tariff in the industry, the present power supply situation in the country would not make this possible for now.

But, he revealed that the Federal Government was  currently preparing a bill aimed at providing a legal framework for the new companies in the power sector to operate and collect their due revenue without hindrance.

The bill, which is undergoing scrutiny in the office of the Attorney General of the Federation‎ also aims to provide stiffer sanction for perpetrators of energy theft, bill defaulters and vandalism of electricity equipment, Dikki said.

According to him, those who engage in these acts were saboteurs of the development of the privatised power sector.

He stated that it was the responsibility of the Federal Government to provide an enabling environment for the new electricity companies to carry out their business activities without any disturbance or distraction, adding that development in the new Power Holding Company of Nigeria, PHCN, successor companies since the takeover by private investors pointed to a bright future for the industry.

He noted that initiatives such as the technical partnership with a global brands like the TATA Group of India and KPMG, exploration of alternative sources of power supply through embedded generation and novel metering plans, among other innovations by Eko Electricity Distribution Company, could not have been achieved under the old monolithic structure of PHCN within a time frame of less than a year.

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