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On August 14, 2017, Babatunde Fashola, minister of Power, Works and Housing met with operators of the power sector, at Kombotso Transmission Station, in Kano.
Here are five lessons from the 18th edition of the monthly meeting:
DisCos ‘stripped’ of exclusive rights over supply of electricity meters
Do DisCos really have exclusive rights over supply of meters? Not according to the Electric Power Sector Reform (EPSR) Act 2005, but in practice they do. In 2013 when power assets were privatised, the Federal Government allowed DisCos to solely provide meters, to help them shore up their profit margins. DisCos outsourced the service and soon rackets emerge and the whole process was corrupted.
Now the Federal Government is merely reverting back to the original intent of the EPSR. DisCos do not have monopoly over meter supply; it is open and regulated by NERC and Nigerian Electricity Management Service Agency (NEMSA). Anyone licensed by NERC may provide meters, pursuant to the provisions of the EPSR Act 2005.
However, further guidelines are required. If Nigerians buy their own meters, since the DisCos won’t bother to provide any, who will compel the DisCos to connect them in, say, Ajangbadi? What about specification and standards?
FG launches a mini grid act – finally!
Considering that it has been in the works since 2016, a sigh of relief is in order. It had been stalled because though we are 180 million, they can’t find anyone to run NERC. Minigrid regulation guides the development of less than 1MW generation within the country.
The highlights of the regulation include:
- All MiniGrids less than 100kW do not require a permit but require registration with NERC.
- All MiniGrids greater than 100kW but less than 1MW require NERC permit
- All registration should be done on nerc.gov.ng
As usual the devil is in the details. DisCos with rights over franchise areas have been known to frustrate erection of minigrids in remote areas, where they won’t bother to install a pole long after this generation has passed, with bizarre conditions.
TCN is making DisCos and GenCos look bad
A time was that the popular refrain in the industry is that ‘transmission is the weakest link in the power sector value chain’. Now you have my permission to smack anyone who repeats that tripe – em, don’t take this literally, please.
“As at August 10, 2017, 6803MW was recorded as the current available generating capability, with a wheeling capacity of 6700MW by TCN, currently constrained by DisCos inability to take load. This is in line with incremental power policy with improvements from TCN improving the wheeling capacity from 5000MW to 6700MW.”
Great achievement Minister! Is generation capacity falling? It used to be 7500MW, shouldn’t we grow at both ends for the toga of ‘progress’ to merit the hysteria?
“Progress with generation was also noted, due to reduction in vandalism as a result of higher water levels and government efforts leading to improved gas supply, which has by no means solved the gas problems, but has brought the nation closer to reaching the February 2016 milestone of more than 5000MW.”
Does 5,000MW actually seem ambitious? Not when you consider that South Africa is marinating in 40,000MW plus capacity.
State governments free to run their own GenCos and DisCos
According to the communiqué, nothing in the EPSR act prevents electricity generation and distribution by State Governments, and such endeavours were fully supported by the meeting as no monopoly was intended by the law in electricity generation and distribution.
Seriously, have you taken a really good look at some of the state governors in Nigeria? Fayose is buying up ponmo in Ekiti and cursing everything that moves in Abuja, the guy in Kwara is making those who say young people could manage political office look bad.
True, Lagos, Edo and Kaduna and a few others are exceptions but they still have to contend with a small matter about franchise areas. There are ways around it though.
Power Sector Recovery Programme is on course
The meeting provided a progress report on the Power Sector Recovery Programme (PSRP) which is intended to reset and provide an avenue for the effective recovery of the power sector, which included the following
- Continuation of the Payment Assurance Guarantee to Generating Companies (GenCos) which has provided comfort for Gencos and Gascos.
- The constitution of NERC and Rural Electrification Agency (REA) Boards
- Expansion of transmission capacity, which includes the completion and handover of Kukuaba substation which provides relief for Katampe on July 10, 2017.
- The PSRP also recorded progress on metering arising FEC resolution of judgements against the Federal Government in the amount N119billion, while releasing N39 billion funding as a loan for metering.
While these signify progress, there is need to complete many other deliverables including conducting legal review of contracts and direct/bank agreements with the consequences of all types of terminations, legal review of Performance Agreements and obtaining all management accounts from each DISCO on a monthly basis.
On a lighter note, NERC announced that the best performing DisCo of Q1 2017 was Ikeja DisCo … hahahaha!
