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Friday, 14 July 2017 00:00

Power: Discos may lose $2.5bn investment over FG’s new energy policy

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Power Distribution Companies (Discos) are becoming jitter over an impending loss of $2.5 billion investments as the Federal Government finalises the take off of Eligibility Customer Policy, which allows high-end consumers to buy power directly from Generating Companies (Gencos) and completely bypassing (Discos).

While they loathe the policy, consumers are up in celebration, describing the decision as one that offers more options to Nigerians, even as they call for its immediate commencement.
The Minister of Power, Works and Housing, Babatunde Fashola, had on May 15 this year, announced the Eligibility Customer option for consumers following torrents of complaints from all quarters, especially the manufacturing companies, about worsening power supply, escalating bills and acute shortage of pre-paid meters.
The Minister said the policy was not to hurt the investments of Discos or threaten their existence but designed to evolve a robust power market in the country.
Fashola declared that customers could buy power from Gencos by signing a Distribution Use of System (DUoS) to use the Discos’ networks or through the Transmission Use of System (TUoS) if they are larger industries connected directly to the facilities of the Transmission Company of Nigeria (TCN) directly.
The new policy, expected to begin soon, is bouyed by Section 27 of the Electric Power Sector Reform Act (EPSRA) 2005, which permits heavy power customers like industries to buy power from a licensee other than the 11 electricity Discos in the country.
Daily Sun investigations show that the Discos, through their umbrella body, Association of Nigerian Electricity Distributors (ANED), are vehemently opposing the move, saying the electricity market was immature and not competitive to declare eligible customers.
They fear huge revenue losses, inability to recoup their investments, imminent job losses, as some Discos’ workers may become redundant, among other worries.
ANED’s spokesman, Mr. Sunday Oduntan, in a phone conversation with Daily Sun, said the Discos were in deep discussion with the government over the Eligibility Customer Policy and ways to tackle the epileptic power challenges.
“I would not want to say much on Eligibility Customer declaration. But ANED is talking with the Federal Government. We will collaborate with the government on what is best for the country. We will also support any action done in accordance with the laws.
We have contracts and agreements with the government on power and that should guide us. As for bypassing Discos, put us in your shoes and know what the implication might be. Our understanding is that eligible customers may only be declared by the Minister when a competitive market exists in the Nigerian Electricity Supply Industry (NESI),” he said.
But while describing the move as a right step in the right direction, the Executive Secretary of Power Generating Companies (Gencos), Joy Ogaji, said substantial power has been generated but left stranded because Discos have not evacuated and distributed it to consumers.
Spokesman of the Nigerian Electricity Regulatory Commission (NERC), Dr. Usman Abba-Arabi, said the new policy on eligibility is expected to bring into play new and stranded generation capacities, which may now be contracted between Gencos and the customers.
Already, high-end power consumers who spoke with Daily Sun are anxiously waiting for the immediate take off of the new policy, describing it as a soothing relief to the stranglehold of Discos.
Mr. Ikenna Emejuru who runs a big printing outfit in Aba, Abia State, told Daily Sun on phone that Discos had not been fair to consumers due to mounting estimated bills and poor power supply.
“I can’t wait for this policy to take off. I know how much I spend every month on electricity bills to power my machines. There is no pre-paid meter. We have complained bitterly and all we keep getting are promises upon promises.
The cost of production is high because aside the estimated bills and poor supply, we also have to run generators and you know how much a litre of diesel is, and maintaining the equipment. Power is the heart of business. So, let’s buy from Gencos directly. They have stranded power. We can buy it and operate. Thousands of companies will spring up once power issue is tackled,” he said.
Another consumer, Seun Ade, a private school owner in Ogun State, urged the government to speed up the commencement of the Eligibility Customer Policy, even as he called for penalties against the Discos for the epileptic power situation in the country.
“Discos are really punishing us. When PHCN was unbundled, we all rejoiced as we expected better days. Now it is worse. Estimated bills, coupled with poor metering are compounding our woes.
So, the policy is good. Perhaps when Discos see that the market is serious and very competitive, they will sit up. The monopoly status is probably making them complacent. But we can’t keep paying for darkness,” he said.
Mr. Simon John, who is a residential customer connected to a three-phase line in Mararaba suburb of Nasarawa State, said there is a serious drop in power supply from eight hours in two days to almost zero.
“Despite the over 15-day blackout in May and June, they still brought bills. I have decided not to pay any bill till I see a significant improvement in power supply,” he said.



Credit: The Sun.   14-07-2017

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