July 26, 2022

Electricity: MicCom calls for stakeholders collaboration to resolve tariff deficit

By Prince Okafor

Chief Operating Officer of MicCom Cables & Wires, Bukola Adubi, has proposed collaboration between stakeholders in the power sector to resolve tariff deficit.

The Nigerian Electricity Regulatory Commission (NERC) report, had disclosed that the Aggregate Technical, Commercial & Collection losses in the Nigerian power sector stood at 50.01 percent in the second quarter of 2021, about 30 percent higher than the Expected Industry Average of 22.11 percent,

However, speaking on the sideline of the 2022 Nigeria Oil and Gas Conference and Exhibition, in Abuja, with the theme “Funding the Nigerian Energy Mix for Sustainable Economic Growth,” Adubi said that metering requires significant state and Federal Government intervention, adding that the Distribution Companies (DisCos) need to increase capital investment into the distribution network infrastructure.

“To achieve the goals of the Presidential Power Initiative, there is a need for the decentralisation of distribution to effectively curtail DisCos monopoly as well as the exploration of sustainable green power alternative to shield against global fossil fuel price hikes and gas production shortfalls.

“Allowing states to develop a localised regulatory framework, will improve efficiency and transparency, and ensure complete removal of electricity from the exclusive list. Other steps includes ensuring stability in policymaking to incentivise investments and relaxing local content requirements to allow entrance of substantial foreign expertise to increase private sector participation.

“The proposed Electricity Bill, currently before the National Assembly, will have impact on the dilution of the Minister’s powers in sector oversight, and retention of exclusive franchise areas for DisCos,” she said.

She commended current steps being taken to close the metering gap such as intervention from states; Central Bank of Nigeria (CBN) intervention; provision of partial risk guarantees to IPPs; capping of estimated billing to control tariff deficits; and franchising of metering, billing and collection process by DisCos.