Electricity: GenCos May Begin Direct Sale to Heavy Consumers


There are indications that electricity generation companies (Gencos) are considering the option of selling some of their generated power directly to heavy consumers.

The Managing Director of Niger Delta Power Holding Company (NDPHC), Chiedu Ugbo, who gave the hint at the October edition of Nextier Power Dialogue in Abuja, said the consideration is as a result of the  continued failure of distribution companies (Discos) to pay for electricity sold to them as at when due.

Ugbo said the option of direct sale to heavy electricity users like steel plants was being considered by the Gencos so as to ensure prompt collection of

He said the option of direct contract was considered so that non of parties in the electricity production value chain would feel shortchanged, adding that Discos have often failed to adequately pay for whatever volume of power they get from them despite indications that these heavy buyers often pay their bills promptly.

Ugbo, however, said the proposal would need the approval and declaration of the Minister of Power, Works and Housing, Babatunde Fashola, because Nigeria’s power policy would not permit operators to independently choose who to sell their services or products to.

It is recalled that the (DisCos) and Generation Companies (GenCos) have always blamed setbacks in the power production chain to weak transmission network.

The blame game started on August when its Managing Director of Transmission Company of Nigeria (TCN) Dr. Atiku Abubakar alleged that the distribution companies were rejecting load allocation from the Nigerian Electricity System Operation (SO) for inability to meet up with invoicing for the load to the Market Operator (MO). The TCN is composed of the MO and SO.

He said: “On a final note, let me assure the DisCos and GenCos and the generality of Nigerians that TCN is determined to improve the services so that it does not appear and it is not the weakest link in the power sector value chain.

Although he declined to name the DisCos that were rejecting load, Atiku said the TCN has the capacity to transfer more power to the companies.

Meanwhile, the DisCos under the umbrella of Association of Nigerian Electricity Distributors (ANED), said that the companies were losing an average of N1 billion monthly as a result of the limited capacity of the TCN in different parts of the country, especially in the Northern areas. The association’s Executive Director, Research & Advocacy, Sunday Olurotimi Oduntan, said in a statement:

“Even worse is TCN’s inability to meet its financial obligations, relative to this shortfall, thereby compromising the DisCos’ ability to meet their obligations to the Market Operator.

Source: National Mirror

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