Seven months after the commencement of the transitional electricity market (TEM) generation and distribution companies, GENCOs and DISCOs are yet to meet the contractual terms for the implementation.
This was disclosed by the Transition Company of Nigeria, TCN. Ngozi Osuhor, Executive Director, Nigerian Electricity Market, an arm of the TCN in charge of systems operations, maintained that the DISCOs are not prepared for the take-off of TEM, as they continue to circumvent its contractual demands.
“I was a DISCO CEO up until that time (when TEM was declared) before I became a market operator, and I noticed that it was not actually the right time to declare TEM. At the time the DISCOs were sold, most of the buyers did not have the opportunity to see what they were buying. The labour unions prevented the buyers from seeing the facilities because the government, at that time, had not resolved the labour issues.
“But now, TEM has been declared and this means we are now in a commercial market; so, if I give you any quantum of energy, you should pay me for it. But the irony is that we are not able to do that. So, for some commentators, which included me, we were not ready for TEM at the time it was declared. But it has been declared. And you see government policies, once you get there, you are there, and you cannot go back. Everyone thought the declaration would arouse competition and harass everybody and make them bring the money. But this has not happened,” she said.
The federal government had opened up the power sector to competition through the declaration of TEM, as participants commenced full trading by contracts, just as the institutional and normative structures of a competitive and efficient electricity market was put in place.
Sequel to this, government had early this year told investors that it would not accept any excuse for not being able to provide Nigerians with uninterrupted power supply as a soon as TEM was declared. However, Osuhor said that the DISCOs are yet to comply.
Despite the 14 months period given to the firms before TEM was declared, the investors, particularly the DISCOs, are still not living up to the expectation of TEM. For instance, they have reportedly failed to uphold the contractual agreement of making remittances to the government as well as meter all electricity consumers.
Osuhor noted that “in the scheme of things, energy sold should be paid for and that is when it will become a commercial market.”