–Says without subsidies tariff will rise to N130/kwh

–Investigates DisCos licence extension

By Obas Esiedesa

With over 13,000 Megawatts of installed power generation capacity and 7,100MW transmission capacity, the Federal Government has said priorities would now shift to improving the distribution segment of the Nigerian Electricity Supply Industry, NESI, as part of an effort to boost power supply to homes and businesses.

The Minister of Power, Chief Adebayo Adelabu who disclosed this during an interactive session with journalists in Abuja, said the government would work hard to bridge the seven million metering gap in the industry to boost liquidity.

Chief Adelabu explained that after many years of failing to improve the power supply, it was for the government to change tact and put in place policies that specifically target the distribution segment.

Checks by Vanguard on national grid data posted by the National System Operator, a semi-autonomous unit in the Transmission Company of Nigeria, TCN, showed that while power generation was 4,637MW as of 2 pm, DisCos load allocation was 3,937MW.

He stated that the policy change would include a complete review of the structure of the electricity distribution companies with the size of the franchise area, capitalization and tenure of licences in focus.

He noted that there was no point in having so much generation capacity without the capacity to deliver improved power to consumers, adding: “What we want to adopt is a bottom-up approach which is delivery focused. The little we generate, are we able to get it to consumers? So we are starting from the customer end. People always say there are three segments in the value chain but I see it as a five-segment value chain, that is from gas producers to generation plants, to transmission, to distribution, and then to customers. This is because customers have issues that we have to resolve.

“Number one issue is the meter gap that we have to close. If you do not meter you cannot measure, if you cannot measure, you cannot bill. If cannot bill you cannot collect. The collection is too poor for this. Liquidity is a major constraint. And the blood that you need in the system is liquidity. As there is a direct transmission of electricity from generation to customers there must be a reversed transmission of cash all through the value chain”.

He stressed that the industry also needs to tackle power theft and vandalism of power infrastructure, saying those caught would be made to face the law.

Adelabu who insisted that privatization was the wrong option taken by the government in 2013, said commercialization would have benefitted the country more with improved investment and performance.

He said the government was looking at the process taken by the Nigerian Electricity Regulatory Commission, NERC, in extending operational licenses of the DisCos.

“We are going to look at the structure of the DisCos to see if they are structured in a way that would make them deliver the services we want them to deliver. We look at the territorial coverage of the DisCos to see if they are too large and see how we can create mini-DisCos out of the area.

“We are not going to impose anything because we are aware that contracts have been signed and commitments made. We are holistically looking at all these and very soon a clear guide and direction will be issued by the government”, he stated.

He disclosed that the government has continued to support the sector and the tariff system through subsidies, pointing out that with subsidies electricity tariff would double to about N130/Kwh.

The Minister disclosed that the 700MW Zungeru Hydro in Niger State was ready, saying it will come on-stream before the end of November.