Revoke licences of non-performing DisCos, FG orders NERC
…Says present blackout unacceptable, targets 6,000MW
…Plans gradual phase out of subsidies
The Federal Government on Monday issued marching orders to its agencies regulating the power sector, directing the Nigerian Electricity Regulatory Commission, NERC, to withdraw licences of non-performing electricity distribution companies, DisCos.
The government accused the DisCos of not doing enough to improve supply despite the availability of power on the national grid.
The Minister of Power, Chief Adebayo Adelabu who stated this during a meeting with the head of the agencies in Abuja said the distribution segment remains the weakest link in the electricity supply value chain.
Chief Adelabu stressed that NERC must look for creative ways of getting the DisCos to improve supply including the imposition of stiff sanctions on utilities which fail to pick their allocations and outright cancellation of licences.
He insisted that the franchise areas covered by the DisCos were too large, adding the government would pursue a restructuring that would create smaller DisCos with companies restricted to one state each.
“Distribution is our weakest point and it is the closest to the consumers. If we don’t get distribution right, to Nigerians, we’re not doing anything. So, efforts need to be put on this. In fact, we must intensify our efforts in ensuring that we address all issues relating to distribution.
“It is true that the distribution companies are in the hands of the private sector. We don’t have direct control. But we need to compel them for performance. They must perform. If they do not perform, all our effort in generation, in transmission is zero. I’ve also had a meeting with the Chairman of NERC on how we’re going to address these performance issues of the electricity distribution companies across the nation.
“Why we have new policies in our power sector policy framework, which we’re going to finalize to address long-term issues in distribution, we must proffer short-term solutions to the lingering crisis. Before we get to that, we’re talking about the issue of the capitalization of the discourse, for them to inject funds, to improve infrastructure.
“We are talking about issues of restructuring the DisCos along state lines, to make them manageable in size. Also, issuing new franchises to smaller DisCos to take over areas not being served by the existing ones or that have been underserved by the existing ones.
“I’ve said it before now that non performance of DisCos in terms of epileptic power supply qualifies as a basis for revocation of license. Any DisCo that is found-wanting will be severely dealt with because their actions or inactions directly affect the performance of the sector”.
The Minister pointed out that wilful refusal by any DisCo to take up available power “is a qualified basis for the revocation of licences too”, adding that the distribution companies must be ready to pick up 90-99 percent of load allocated to them.
He described the ongoing electricity rationing across the country as unacceptable, disclosing the government plans to improve power generation from the present 4,000MW to 6,000MW in the next six months.
This, he said, would be achieved by paying off substantial debts owed to power generation companies and gas suppliers. “So what we are looking at is to have an agreement to ramp up to a minimum of 6,000 megawatts within the next three to six months. I know that the highest we ever generated was 5,700, about three years ago. That was specifically November, 2021.
“And this 5,700 was also distributed. If we could achieve 5,700 at that time, I believe we still have infrastructure to generate between 6,000 and 6,500. In terms of the generating companies, I have no doubt in my mind that the existing capacity can give us 6,500 once there is stability in supply of gas.
“I’ve been to a number of the generating companies and I confirmed that they have this installed capacity. And a large percentage of this installed capacity is operational, but they are not available because of low or shortage in gas supply. Once there is gas supply, we want to ramp up generation to a minimum 6,000MW”.
He noted that while the Federal Government would continue to pay electricity subsidies in the short-term, it plans to gradually phase it out in the next three years and return the sector to a commercially driven tariff.
Speaking to journalists after the meeting, the Managing Director of the Transmission Company of Nigeria, Engr. Sule Abdulaziz explained that the fire that engulfed its substation in Kano happened while its engineers were trying to fix a leakage from one of its transformers.
He disclosed that power has been restored to most parts of the commercial city, adding that the remaining feeders would be restored before the end of Monday.
“The transformer involved was having some leakages. So our engineering team went there to work on it. They took an outage, followed all the requirements to do a maintenance job and they did it successfully.
Now as they were putting back the transformer oil on the transformer, unfortunately, the filtering machine they were using caught fire.
“And before they could do anything, the fire had spread even to the second transformer. But thank God, with the help of the fire brigade, we were able to quench the fire”, he added.
Vanguard had reported how the minister of Power, Mr Adebayo Adelabu had summoned chief executive officers of two Electricity Distribution Companies (DisCos) to a meeting over worsening supply situations in their regions.
Those invited to the meeting are chief executive officers of Abuja Electricity Distribution Company (AEDC) and Ibadan Electricity Distribution Company (IBDC).
Also summoned to the meeting is Mr Sule Abdulazeez, Managing Director of the Transmission Company of Nigeria (TCN).
The summon is contained in a letter signed by Mr B.U Mustapha, Director, Distribution Services, Ministry of Power.
The management of other non-performing distribution companies would also be queried over non-performance as reports continue to filter in on the situation in their regions.
The two DisCos have been summoned due to the worsening power supply situation in their regions in spite of improved supply from TCN.
Mr Bolaji Tunji, Special Adviser, Strategic Communication and Media Relations at the ministry stated on Saturday in Abuja that gas shortage notwithstanding, electricity generation had been ramped up to more than 4000mw in recent days.
“The ministry expects power supply to have improved across the country, as opposed to current experience in some regions.
“Findings revealed that some distribution companies were deliberately not taking up power supply from TCN, while some power lines were also damaged by vandals in Abuja, Benin, Port Harcourt and Ibadan regions,’’ he stated.