THE Federal Government, yesterday, issued a marching order, requesting the Nigerian power Regulatory Commission, NERC, to cancel licenses of non-performing power distribution firms, DISCOs.
This is even as electricity output declined year-on-year, YoY, by 21 per cent to 3,475MW in March 2024, from 4,404MW in the equivalent month of 2023, owing to several challenges, including poor investment and limited gas supplies.
But, on month-on-month, MoM to 3,475 megawatts, MW in March 2024, from 4,043MW in February 2024, thus leading numerous Electricity Distribution Companies, DISCOs, to commence on loading.
Data collected by Vanguard from the National System Operator, a unit of the Transmission Company of Nigeria, TCN, revealed that supply remained inadequate, thereby hurting adversely families and businesses nationally.
The government accused the DisCos of not doing enough to enhance supply despite the availability of electricity on the national grid.
The Minister of Power, Adebayo Adelabu who revealed this at a meeting with the head of the agencies in Abuja said the distribution sector remained the weakest link in the energy supply value chain.
Adelabu noted that NERC must seek for inventive methods of pushing the DISCOs to increase supply including the introduction of heavy penalty on utilities who fail to select their allocations and outright revocation of lincences.
He stated that the franchise territories covered by the DISCOs were too wide, adding the government will seek a reform that would establish smaller DISCOs with enterprises confined 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 accomplishing anything. So, efforts need to be taken on this. In fact, we must concentrate our efforts in ensuring that we handle all challenges connected to distribution. “It is true that the distribution businesses are in the hands of the private sector. We don’t have direct control. But we need to force them for performance. They must perform. If they do not perform, all our work in generating, in transmission is worthless. I’ve also had a discussion with the Chairman of NERC on how we’re going to handle these performance concerns of the electrical distribution businesses around the country.
“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 deliberate refusal by any DISCO to take up available electricity “is a qualified basis for the revocation of licenses too”, adding that the distribution firms must be ready to pick up 90-99 percent of load allotted to them.
He termed the continued energy rationing throughout the nation as intolerable, exposing the government wants to boost power production from the existing 4,000MW to 6,000MW in the next six months.
This, he stated, will be done by paying off huge debts owing to electricity producing firms and gas providers.
“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 highlighted that although the Federal Government will continue to provide power subsidies in the short-term, it wants to progressively phase it out in the following three years and restore the sector to a commercially driven rate.
Speaking to press following the meeting, the Managing Director of the Transmission Company of Nigeria, Engr. Sule Abdulaziz stated that the fire that consumed its substation in Kano erupted as its engineers were attempting to patch a leakage from one of its transformers.