Afam Power Plant
Text Box: Says teething issues unavoidable
•Load allocation below assumptions in MYTO model
•Confusion over when electricity consumers will start to pay bill
•Lack of Gas and the attendant poor power delivery
•Erosion of public confidence on the capacity of new investors in power firms.
The Federal Government at the weekend responded to the tale of woes by new investors in the power sector, saying it was not under any illusion that the new dispensation in the sector won’t face some challenges before the return of stability in the operation of the new owners of power firms.
The clarification came on the heels of a harvest of complaints by new investors in the sector barely 27 days after taking over the operations of successor generation and distribution companies of the defunct Power Holding Company of Nigeria (PHCN).
The investors, who spoke at a meeting in Abuja, last week, disclosed that their reality checks on the power systems they took over indicated that the system seemed to be “upside down.”
But responding to the complaints of the new investors, Chairman Presidential Taskforce on Power Mr. Beks Dagogo-Jack explained that every major sector reform exercise was bound to face teething problems.
“No one in government gave an impression that the minute we handed over, all our electricity problems would vanish,” he said, adding that a reform program was akin to a pregnancy.
“For nine months, you focused on the mother and after the baby is born, you shift more attention to the nurturing of the baby who is more vulnerable than the mother.”
Dagogo-Jack said “the business of nurturing the reform to maturity is not a casual responsibility and rests squarely on the Ministry of Power, with the invaluable support of the regulator and the Bureau of Public Enterprises.”
And according to him, the Presidential Task Force remains on hand to provide the much-needed technical support for risk anticipation dimensioning as well as solution generation.”
Asked about the way forward, he said: “A well-integrated proactive progress management team structure under the leadership of the Honourable Minister of Power, which meets for two hours daily, at least to resolve critical issues and sustain market confidence, is a sine qua non for ensuring steady progress during this teething period.”
The aggrieved power sector investors made their complaints known to the Nigerian Electricity Regulatory Commission (NERC) at the meeting, which was the first, since they physically took over their electricity assets by the federal government on November 1.
One of such investors who expressed his discovery is the Managing Director of Kano Electricity Distribution Company, Dr. Jamil Gwamna.
He said the market rules, especially with regards to the Multi Year Tariff Order (MYTO-2), had been turned upside down.
Gwamna had said: “In terms of complying with rules especially those in MYTO, the reality on the ground in Kano Disco is that all the assumptions in the MYTO model have been turned upside down. Load allocation to Kano is so bad that for the last three days we are getting as low as 40 megawatts (MW) to cover Kano, Jigawa and Katsina states. Not only is that so, about 20MW gone to Niger Republic.
“How on earth will I make money? We are not even near the assumption of MYTO because MYTO says I should be allocated eight per cent of the total generation capacity, which means if the generation is 2,000MW, Kano should be allocated at least 160MW. Yesterday, our allocation was 80MW and out of that 25MW is going to Niger Republic. So, I think these are serious issues, which we have found on the ground and they should be addressed urgently.”
Also, the Managing Director of Benin Distribution Company, Funke Osibodu, said: “There is confusion in the public and we have to as a group address the confusion in the public.
For instance, the public believe that they are not supposed to pay their bills until January, they believe that the debt they owed before should be written off and that they should stand in front of you and collect free meters.
“In the past couple of weeks, there have been problems nationwide. The public now believe that when they don’t have power, the new owners do not know what they are doing when in reality it is because of lack of gas.”
Other officials who spoke on behalf of Egbin and Geregu power plants accused the Market Operator (MO) and System Operator of the Transmission Company of Nigeria (TCN) of not adhering to the MYTO-2 agreements and provisions in the interim rules, stating that the MO does not use the official rate stipulated in the interim rules.
However, the Chairman of NERC, Dr. Sam Amadi, in his response, assured them that the regulator would address all the issues raised, adding that the essence of calling the meeting was to bring the operators together to craft out interventions that will address the problems.
He said Yola and Kano distribution companies had perennially low power allocation problem, stating that although the MYTO-2 provides for a particular allocation to all distribution companies, they were not getting enough power to supply.
Part of the reasons, he said, was based on transmission while some were based on capacity of the distribution companies to receive.
He said the regulator would look at the commercial framework and find ways of ensuring that the concerned distribution company that is receiving less power is also to have their revenue to service their operation.