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The Association of Power Generation Companies (APGC) says the Federal Government’s directive on direct sale of electricity to end users, will address major challenges in the nation’s power sector.
The Federal Government had through the Nigerian Electricity Regulatory Commission (NERC) announced on May 19, 2017 that GenCos in Nigeria were free to generate and sell electricity to end-users in Nigeria.
Joy Ogaji, Executive Secretary, APGC, said this at a news conference in Abuja on Wednesday.
The government’s decision tagged as the ‘Eligible Customers’ Regime”, is in line with the provisions of Section 27 of the Electric Power Sector Reform Act 2005 (EPSRA).
The decision, when fully implemented would have very little interference on determination of power generated from the 11 electricity distribution companies in the country.
Ogaji said that the declaration of eligible customers portend several benefits for the sector as it would also address some of the revenue shortfalls in the industry.
She said the declaration would make GenCos to ramp up their generation capacities, to provide supply to eligible customers and address issues on financial viability in the electricity supply value chain.
Ogaji said that the envisaged guaranteed cash flow that would follow the practical implementation of the exercise would definitely boost morale of potential investors in the area of gas field development.
The APGC executive secretary said that the decision would also boost the development of the manufacturing sector, as constant power generation and supply would be provided to meet production demands.
According to her, declaration of customer eligibility will further introduce competition on the demand side and complete the liberalisation of the Nigerian Electricity Supply Industry (NESI).
This, Ogaji said, would result in greater pressure for efficiency on the suppliers of electricity in the country.
She said that the presence of retailers, or the mere possibility of future competition, would force existing power distributors to establish appropriate customer services and commercial divisions.
According to her, the measure will also promote national economic development through supply of electricity to the productive sectors of the economy.
“This will go a long way to supporting economies of scale, through bulk purchase of electricity,” she said.
She said that the measure would result in further reduction of technical and non-technical losses for bulk high voltage supply in the NESI.
According to her, it will reduce financial risk by supplying power to credit worthy eligible consumers.
Other benefits accrued to the selling of power direct to the consumers, according to Ogaji include: increased attention to consumers, confer on consumer’s power to choose energy supplier.
