Energy

March 25, 2024

Poor power supply: FG moves to take over BEDC, sack management — INVESTIGATION

Electricity

•Delta, Edo, Ekiti, Ondo seek to exercise rights, others

•States have rights to determine future of Discos -Ekiti govt

By Udeme Akpan, Energy Editor

Barely a month after the takeover of Kaduna DisCo over a N10 billion debts, the federal government has concluded plans to take over  Benin Electricity Distribution Company, BEDC, over alleged prolonged poor performance.

BEDC, one of the successor distribution companies, created, following the unbundling and privatization of the state-owned Power Holding Company of Nigeria Plc, currently distributes electricity in Delta, Edo, Ekiti, and Ondo states, with a geographical coverage of 57,353 square kilometres.

Checks by Vanguard, weekend, indicated that the Nigerian Electricity Regulatory Commission, NERC, an independent regulatory body with authority to regulate the electric power sector in Nigeria, has already penciled down new directors and management to manage the DisCo in the coming days.

Meanwhile, the governments of Delta, Edo, Ekiti, and Ondo states, which complained about poor service delivery to their people, have petitioned NERC, seeking to play active roles in the management of BEDC.

The states, which have indicated interest in exercising their rights to participate in the company’s decision-making, also called for the unbundling of the DisCo’s operational areas based on state boundaries, stressing that they had not given consent to other stakeholders, including the Bureau of Public Enterprises, BPE, to act on their behalf.

In their letter – Notification of Interest to Exercise Shareholder Rights in Benin Electricity Distribution Company – to NERC and sighted by Vanguard, the state governments, said: “We write to formally inform NERC of the intent of the governments of Delta, Edo, Ekiti and Ondo states (the BEDC State Governments) regarding our collective residual equity in the Benin Electricity Distribution Company, BEDC.

We intend to exercise shareholder rights – Four states

“After a thorough evaluation of the operational deficiencies and services delivery failures to our states, the BEDC state governments intend to exercise our shareholder rights in BEDC, to ensure the efficient provision of electricity services to our citizens.

“The provision of reliable electricity to enhance the welfare and development of our people is a core priority of our governments.  As such, we cannot afford to overlook the critical importance of ensuring that electricity distribution services provided by BEDC meet the needs and expectations of our populace, henceforth.

“In exercising our shareholder rights, the BEDC state governments intend to actively be involved in the decision-making processes of BEDC, both at the board and management levels of the company, to strengthen service operations to enhance service delivery, improve operational efficiency, increase electricity access to unserved and underserved communities and ultimately, transform the electricity sector within our states.

“Please, note that our demand is not capricious and merely wishes to correct a historical lapse. We wish to emphasize that at no point did the BEDC state governments give any Power of Attorney (PoA) to either the federal ministry of finance incorporated or the bureau of public enterprises, BPE, with respect to our shareholding in PHCN successor, Benin Electricity Distribution Company, or the post-privatized entity.

“It has come to our notice that the commission intends to exercise a regulatory takeover of BEDC by March 31, 2024. The commission is kindly requested to formally notify the BEDC state governments before taking any regulatory action to appoint new directors and a management team for the company. We also urge the commission to immediately commence the process of unbundling BEDC into operational areas along state boundaries.

“We wish to assure the commission of our support and cooperation in exercising any regulatory action against BEDC and its core investor, provided our rights as shareholders in the company are not breached.

“Lastly, we kindly request a meeting with the commission to discuss our intention as outlined in the letter, viz, to exercise our rights in the company to work out how these rights will be exercised under the commission’s regulatory oversight and for the benefit of all stakeholders involved.”

States have rights to determine future of Discos —Ekiti govt

In a telephone interview with Vanguard, the Commissioner for Infrastructure & Public Utilities, Ekiti State, Prof. Mobolaji Ebenezer Aluko, said: “The state and federal governments have 40% of BEDC, and our four states as a whole have 34.2% of that 40%.

”Nationally, all states have 27% of the 40% of government, with the federal having 13%, and then the states have as much right, even more rights, than the federal government, to sit at a table to determine the future of the DisCos.

“The Federal Government has asked the DisCos to unbundle along state lines, according to the Electricity Act 2023.  The BEDC states are merely demanding a seat at the upcoming discussions, in the spirit of subnational democracy. 

”We also believe that our participation will lead to more efficient distribution of the abysmally small energy currently available nationally: that is 13 gigawatts, GW, capacity generation – 8GW Transmission capacity – 3-5GW distribution after Aggregated Technical Commercial and Collection Loss, ATC&C losses.

“The energy mix for power generation should vary from one state to another. Renewable energy should also be utilised and distributed off-grid. The cost of transmission will reduce because of short distances from generation within each state. DisCos should have no monopolies and should provide adequate meters to consumers.”

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