Power Operators Oppose Fashola on Eligible Customer Policy

The private investors in the power sector have restated their opposition to the federal government’s plans to classify a certain category of power consumers as eligible customers that would receive direct supply from the power generation companies.

Reacting to a recent statement by the Minister of Power, Works and Housing, Mr. Babatunde Fashola that the Nigerian Electricity Regulatory Commission (NERC) would release the regulation on eligible customers by next month, the operators argued that the declaration of eligible customer would potentially lead to hike in electricity tariffs.

Speaking yesterday in Lagos at a power roundtable organised by the Lagos Chamber of Commerce and Industry (LCCI), the minister said there was no exclusivity in any Disco or Genco. But in a swift response, the Chairman of Egbin Power Plc. Mr. Kola Adesina, who was present at the LCCI event, told the minister that tariffs would increase if eligible customers were removed from the portfolio of the distribution companies.

“When the minister said that tariff is politics, I shifted a little. The assets were not sold emotionally as the minister said. When the Discos were sold, they were sold based on a model – certain specific exchange, certain expected revenue, among others. But from the day the assets were handed over to the investors, the government did not meet its own part of the bargaining. So, the assets were not sold emotionally. The banks in Nigeria are bleeding as a result of the weight of acquisition financing by the power sector,” Adesina explained.

Adesina also faulted the minister’s claim that tariff is associated with politics, stressing that as an investor, his concern is the economics of tariffs and not politics. He acknowledged that with the high level of poverty in the country, it would be difficult for customers who cannot pay for electricity bills to pay for meters. “There is a need for holistic review of where we are; where we want to be. When you remove eligible customers from the portfolio of the Discos, then tariff will go up. Let us have a stakeholder engagement,” Adesina added.

Fashola had told the participants at the LCCI even that the regulations for the eligible customers would also be ready by October. “What does eligible customer mean? Egbin Power Plant can sell power to three classes of people. It can sell to the Discos; it can sell to the Bulk Trader, which is the NBET and it can sell to the eligible customers. But that eligible customer is not defined. The responsibility to define eligible customer was vested in my by law and I have issued the policy statements to NERC.