DisCos: Federal government lied on generation of 7,000mw of electricity - AFRICAN PARLIAMENTARY NEWS



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Tuesday, March 26, 2019

DisCos: Federal government lied on generation of 7,000mw of electricity

The Electricity Distribution Companies in Nigeria has described as a lie the claim by the Federal Government that it has generated 7,000 Mega Watts of electricity for a while now.

The position of the Discos was made known by the Executive Secretary of the Association of Nigeria Electricity Distributors, Sunday Oduntan, when he spoke with newsmen on Sunday.

Oduntan spoke against the backdrop of the assertion of the Transmission Company of Nigeria that 7,000mw of electricity was being generated but the Discos lack the capacity to distribute it.

He said such quantum of electricity does not enter customers’ homes in Nigeria.
He said: “Today’s TCN has not transported to my members anything near 6,000mw one day.

“Never in the history of Nigeria.

“TCN has not welled power up to 6,000mw for one week from 1960 to 2019.
“Let somebody come out and state otherwise.

“We will asked them which day and when?”

Oduntan also said the non-review of the Multi-Year Tariff Order since February 1, 2016 has put the shortfall of the Nigerian Electricity Supply Industry beyond the threshold N1.4 trillion.

Explaining the damage caused by the freezing of the review on the industry, he said: “Our records show a figure in excess of N1.4 trillion shortfall of the value chain.”

He noted that the association would been bold to name non-performing DisCos if the companies had a cost reflective tariff.

He said: “If you cannot collect 30 per cent (revenue), no Jupiter should expect you to remit 100 per cent.”

Speaking on how power supply can be improved, Oduntan said the sector must agree on the landing cost and the payment for it.

He said the “other option is to say the price is N100, we subsidise the poor who cannot pay N11,000 for energy every month.

“You now subsidise it.

“If you introduce subsidy, the shortfall, the remaining figure has to be paid for.”
Oduntan listed Kenya, Tunisia, Uganda, South Africa, Ethiopia, Morocco, Egypt, Algeria and Burkina Faso as countries that subsidise electricity for poor consumers.

He said another is that “if the government is not buoyant enough to subsidise electricity, it should allow the National Electricity Regulatory Commission to make a law that will create an instrument called regulatory asset.”

He said this will cover the shortfall in the industry because the DisCos can use it to borrow money from banks, adding: “In every tariff computation there is an allowance for Capital Expenditure, which the operators’ expenditure must not exceed.

“The current tariff in the industry is a suppressed one as it gives all DisCos N45 billion and each DisCo N5.5 billion annual expenditure.”

Oduntan said the TCN, on the other hand, has a total of N50 billion annual expenditure approved for it, stressing that it was unfair for the TCN to complain about DisCos’ low investment.

With that heavy CAPEX, he said, the TCN cannot solve half of its problems.

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