N701bn NBET Fund can’t stabilise power – ANED
Chief Sunday Olurotimi Oduntan is the Executive Director, Research and Advocacy at the Association of Nigerian Electricity Distributors (ANED). In this interview, Chief Oduntan said the N701bn Fund to stabilise power generation does not take care of the down-stream sector (DisCos).
Is the N701bn funding being injected into the NBET enough to stabilise the power sector?
The simple answer is that it is not enough. It is like you have a big wound and someone puts a small plaster and says he has treated the wound. The plaster will only work around the small portion. The Vice Chairman of the Nigerian Electricity Regulatory Commission (NERC) has said the same thing too. We welcome the initiative by the Federal Government but we are saying that even when you intervene in the upstream, you cannot leave the downstream to die. Government should have done everything holistically and solve the problem once and for all. It needs to take more steps to ensure the survival of the Nigerian Electricity Supply Industry (NESI).
You mentioned the downstream sector. What are those things government should have addressed?
The fact that they have provided the ready access money for Nigerian Bulk Electricity Trading Ltd (NBET) to reduce the debt at generation level does not in any way reduce the high invoices that come from the Generation Companies (GenCos) to the Distribution Companies (DisCos) at the downstream. Am still saying repeatedly that, if we buy a product for N68 and we are only allowed by the fixed tariff to sell at N31, who then bears the responsibility of the shortfall of about N37. That is what government should be talking about. When that is still the case, even if you give over N701billion to the upstream, it has not solved the problem.
At the recent power sector meeting, the ministry said they are verifying N59bn claims of MDAs debt by DisCos. What is your view about this?
The Minister of Power, Mr Babatunde Fashola, made the comment at the sectorial meeting. ANED had attended nine of such meetings but was banned since October 2016 from attending others, that we are no more stakeholders.
As at March 2017, the MDAs debts have not been paid, I understand the process is ongoing.
Another issue we have with the payment is that the calculation they are doing cannot work, it is an unfair calculation. They are saying this government will only pay the verified debts from 2015 when they took over. Government is a continuum and the debts should be paid from November 1, 2013 to date since the privatisation. The data that our members submitted is what they are cutting down to 2015; they could pay by instalments but the debts must be from 2013. Do they want us to go to Mr. Goodluck Jonathan to pay the previous debts before 2015? These are the issues that the Permanent Secretary at the Ministry of Power, Louis Edozien does not want us to talk about. He would rather we keep quiet but he should know that we do not report to him.
Our grievances are with the Permanent Secretary and not with Fashola because he advises the minister. The truth is that Mr. Edozien has decided to run the power sector the way he wants to. The issue we have today with them is that MDAs debt should be paid from 2015 and that is unacceptable and unfair. They should pay from the point of post privatisation. That is the information I have, if they say it is not true then they should present their facts.
CAPMI was suspended in November 2016, what is the effect of this on your members?
Those who stopped the Credited Advanced Payment for Metering Initiative (CAPMI) were ill advised. It was an option for those who want to be metered quickly before the meter roll out of DisCos gets to them. Stopping it is making it impossible for those customers who are able and willing to pay for their own meters and get a refund not have an option. I have not seen any country when some officials will just stop such option. It is either those who stopped did not think about the consequences or they stopped it to blame DisCos’ inability to meter all customers at once. The suspension has had huge effect on our members because the actual meter roll out is not as good as we had planned it but then many DisCos are still rolling out meters like Jos, Abuja Eko etc - only that we are not doing it at a pace that is faster; this still boils down to the liquidity crisis in the sector.
Has the revenue shortfall and liquidity crisis in the power sector decreased?
It has not decreased; the shortfall in revenue for the sector cannot decrease unless it is cleared. An increased power generation can only help to reduce the pace at which it grows. Even the so- called energy improvement is not up to 5,000 megawatts (mw) which is the benchmark of the present tariff responsible for this shortfall. The shortfall so far has risen to about N1 trillion from N802 billion last December.