Stakeholders seek leeway for Discos, NERC despite harsh business environment
EXPERTS in Nigeria’s power sector have called for improvement in the operations of distribution companies as well as the sector’s regulator, Nigerian Electricity Regulatory Commission ( NERC) despite the harsh business environment in the country.
The stakeholders noted that while Nigerians and the utility companies are all battling with rising insecurity and harsh conditions of living, there was need for accountability, strong regulation, prompt payment of electricity tariff and strong policies that would address the gloomy state of the nation’s power sector.
Consultant, Nextier Power, Chiamaka Asoegwu, told The Guardian in a chat that while part of the performance agreements that led to the unbundling of the defunct power sector into the 11 Electricity Distribution Companies was the setting of cost- reflective tariffs that would incentivize more investments in power supply reliability and a vailability, both the regulator and the Discos have not fulfilled their
end of the bargain.
“The macroeconomic factor in Nigeria that is especially important to tariff setting is foreign exchange ( because gas prices and many Capital Expenditures are indexed to the dollar). There are continuous security threats in various parts of Nigeria. In the north, parts of the transmission network were blown up by terrorists, in the south, we have continuous pipeline destruction making gas unavailable, and discos continue to experience cable vandalism and theft in various areas of their network, to mention but a few,” Asoegwu noted.
According to her, the prevailing factors affected power availability to the customers and hamper Discos best effort at providing reliable supply, adding that the same economic and security challenges affect every Nigerian in their various endeavours and potentially leads to the inability of customers to pay for the higher tariffs.
She noted that the country must therefore create an enabling environment for both businesses and the populace to increase the disposable income, ensure security, and a thriving atmosphere for businesses and foreign investments.
“There is a need to review existing policies and be ready with the political will to drive implementation. The discos should be accountable as well as regulators on the requirements of their performance contracts. The discos should optimize their operations and clean their systems to generate more revenue and reduce wastages and losses.
Asoegwu stated that with a poorly diversified energy mix where the majority ( 85 per cent) of installed capacity is fueled by gas and still operating in the transitional electricity market ( TEM), as against the Final Market, with bilateral contracts between electricity buyers and sellers at all levels, and a central balancing mechanism through the creation of a spot electricity market, the country must increase energy mix and drive the adoption of other energy sources.
She also said metering remained crucial and the way forward for Discos, adding that the Federal Government must be actively involved in monitoring the mass metering scheme to ensure accelerated progress, especially in view of the current ServiceBased Tariff regime.