Poor transmission: Power distribution firms forfeit N1bn monthly

Energy Crisis Threatens the Western Power Grids25 August 2016, Abuja – Power distribution companies have said they are currently losing over N1bn every month as a result of limited electricity evacuation capacity of the Transmission Company of Nigeria.

According to the Discos, the poor transmission infrastructure in Nigeria is a major contributory factor to the liquidity constraints experienced by most distribution companies across the country.

They also refuted claims by the TCN that Discos were still rejecting electricity load allocated to them and that the distribution companies were the weakest link in the power value chain.

The Managing Director/Chief Executive Officer, TCN, Dr. Abubakar Atiku, had told journalists in Abuja on Monday that “the weakest link is truly identified as those distribution companies rejecting customers load, thereby throwing them into darkness, resulting in the lowering of generation, although we have the capacity to generate more.”

But in a swift reaction to Atiku’s statement, the Executive Director, Association of Nigerian Electricity Distributors, an umbrella body for the Discos, Mr. Sunday Oduntan, on Wednesday stated that no matter how the TCN tried to colour the reality of its shortcomings, transmission was still the weakest link in the power value chain.

He argued that Discos were currently recording losses due to the poor state of transmission infrastructure in Nigeria and that it was inconceivable that any Disco would load-shed as this would diminish its revenue prospects and alienate its customers.

Oduntan said, “Factually, a major contribution to the liquidity challenges that the Discos are currently experiencing is the TCN’s infrastructure and technical limitations in wheeling power to the proper areas of a Discos’ geographical footprint.

“Discos are currently experiencing a monthly loss in excess of N1bn due to limited transmission capacities in various areas of the country, especially the northern part. Even worse is the TCN’s inability to meet its financial obligations, relative to this shortfall, thereby compromising the Discos’ ability to meet their obligations to the Market Operator.

He stressed the need to properly fund the TCN and train its project management personnel in order to upgrade their operational capacity.

Oduntan stated that a fundamental premise of the privatisation of the PHCN successor companies was that the TCN would be operated efficiently, consistent with private sector attributes of productivity and managerial efficiency, adding that this was the basis for the Manitoba Hydro International management contract, which expired last month.

“Such attributes were expected to result in increased wheeling capacity that would complement increased power generation and, ultimately, increased supply to consumers. Alas, progress in that direction remains minimal,” he added.

The Discos spokesperson observed that the maximum wheeling capacity reached by the TCN had been 5,074.7 megawatts, attained on February 2, 2016, stressing that its claims of increased capacity from 5,500MW to 6,000MW were wholly untested and unproven.

He argued that any plan by the TCN to complete 22 critical projects captured in the 2016 budget had to be a function of the availability and release of the requisite funding required for same.

  • The Punch
About the Author