Despite promises to the contrary and stipulations in
the power purchase agreements, electricity
distribution companies (Discos) have no plan to
meter every customer now or in the near future.
the power purchase agreements, electricity
distribution companies (Discos) have no plan to
meter every customer now or in the near future.
Discreet but extensive checks by the Nigerian
Tribune at the Bureau of Public Enterprises (BPE),
Nigeria Electricity Regulatory Commission (NERC),
Federal Ministry of Power, Works and Housing and
Transmission Company of Nigeria (TCN), in Abuja,
revealed a general agreement among the
stakeholders that current electricity charges are still
below commercial rates despite multiple increases
in recent years.
Although efforts by the Nigerian Tribune to obtain
copies of Share Purchase Agreement (SPA) between
the companies and BPE was unsuccessful, as they
were said to be confidential documents, an official
said the Federal Government has actually not
adhered to its side of the bargain, thus, making it
difficult for regulators to also insist on strict
adherence to the agreements by the investors.
The source admitted that part of the deal was for
distribution companies to progressively minimise
power losses by ensuring that every consumer is
captured in the revenue sheet and meters provided,
but said that it was equally agreed that government
ministries, departments and agencies in the federal
and sub-national levels must pay off their
accumulated debts.
“However, a memo suggesting that the debts be
deducted from source was sent to the Minister of
Finance, who in turn forwarded it to President
Goodluck Jonathan. Jonathan approved it, but
nothing happened until that administration ended
and since the present government came in, nothing
has also been done about it.
“Right now, customers especially governments are
owing the companies over N80 billion and they
cannot even go to banks to borrow money because
they have used their facilities, the Central Bank of
Nigeria’s N200 billion loan that is inadequate, to
solve their challenges,” the source explained.
Another official in another agency said “Discos
prefer to purchase their meters from offshore
sources because there, they have opportunity of
credit facilities whereas Nigerian meter
manufacturers insist on cash payment.”
The source said depreciation of naira has made the
N49,000 meter price grossly unrealistic even as the
Discos have not been allowed to transfer the
increment to customers.
Nigerian Tribune further gathered that the fixed
charges that was removed from monthly bills
shortly before the 2015 elections was a political
decision because the industry was not ripe for such
removal.
It was further learnt that the Federal Government
was also responsible for a substantial part of the
woes in the industry by not expanding transmission
facilities as agreed thus suppressing expansion of
electricity generation by Generating Companies
(Cencos).
Some of the Gencos have doubled their capacity
since private investors took over but since
transmission capacity is less than 6,000
megawatts, such Gencos are being asked to
produce less than their capacity.
Meanwhile, there is serious lobbying by senior civil
servants, politicians and businessmen for
government to review the power privatisation.
Nigerian Tribune gathered that civil servants and
politicians believed they have lost great sources of
making extra money and appointments while
powerful businessmen who lost out during the
privatisation process are pushing for its cancellation
so that they could also partake.
However, an official told the Nigerian Tribune that
there are some clauses in the SPA that make it
difficult for any rash decision “because if the
cancellation comes from government without the
companies being in default, treasury will, aside
returning their purchase fund, calculate the profits
that they would have made over a period of five
years and pay the companies.
“But if it is proved that the companies were the
ones that failed to meet the terms of agreement,
government will re-purchase the company for just
US$1.”
