A Review of the Nigerian Energy Industry

Govt accuses distribution companies of rejecting power allocations

28 January 2015, Lagos – As Nigerians grapple with the challenges of inadequate electricity supply, the federal government has accused some electricity distribution companies of rejecting power allocated to them for distribution to customers.

Power2Speaking during a recent visit to the Corporate Head Office of THISDAY in Lagos, Minister of Power, Prof. Chinedu Nebo, who made the accusation, wondered why distribution companies would reject power when Nigerians did not have enough supply.

Nebo noted that some of the challenges militating against adequate supply of electricity in Nigeria were deliberate attempts by some people to punish Nigerians and warned that any company that rejects power allocated to it would be sanctioned by the federal government.

“Do you know that some distribution companies reject power given to them? I had to make a pronouncement that if a distribution company rejects power, it will be penalised. Yes, they reject power. If I name the company, you will be shocked. It is not that they have enough because Nigerians are starving.

“For weeks, I was climbing the five-story building because they starved me and other ministries. At a time, they said that we were not paying and we turned out to be the only ministry paying for power because others are not paying and everything is lumped together. Even when there is power and all the payments made, we don’t have power.”

, I had to invade the company and it was when I called and looked back, I saw that they had already been noted for rejecting power. Since, that time till now, we have been getting more steady power supply. So, sometimes, some of these things are deliberate,” he explained.

Nebo also warned against any form of monopoly and unionisation by the distribution companies, adding that any investor that wants to build mini power plants can feed it into the grid but not necessarily the transmission grid.

“That is why the distribute companies have to come in because if you are generating only 15MW, you don’t need to go to the transmission grid; you feed it directly. That is what I mean but then, what if the distribution companies form a union and refuse to pay you enough to sustain you and at the same time, punishing Nigerians,” he said.

He also said that the country’s power sector requires a strong regulator to check the excesses of the distribution companies.

“That is why we need a strong regulator, who will be able to tell the Discos that they cannot determine all these things by themselves. If there is an input from both because we are moving in that direction – willing buyer, willing seller- so that you can sit down with a Disco and decide on how much they are going to charge.

“Now, that the price of oil has gone down, I can assure you that the price won’t get up to over $100 per barrel again for a very long time, there are many ways to generate power profitably, including even diesel. If you have a 5-megawatt diesel plant, you can effectively generate power and distribute to people around you profitably.

Because the price of diesel is reduced, it will reduce the cost from about N63 to kilowatt hour to somewhere around half of it, which is something that if you get directly from the source, one can do it. But the major snap is that the distribution companies have the knife and the yam. The regulator will eventually move in to make sure that if you have the yam and the knife, at least, you will allow the other person to hold the edge of the knife, so that things will be done equitably,” he explained.

– This Day

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