Power Generation Firms Mull Selling Electricity Directly to Customers

electricity-industry
There are indications that power generating companies may soon embark on supplying electricity to syndicated customers in the country.

This is as a result of the huge debt being owedthe generation companies by Nigerian Electricity Bulk Trader (NBET) for electricity supplied.

The Executive Secretary of the Association of Power Generation Companies (GenCos), Dr. Joy Ogaji, who stated that the association is seriously considering alternative ways to sell power, noted that the Nigeria Electricity Act 2005 makes provision for GenCos to generate and sell electricity directly to eligible customers.

According to her, this is statutory; “yes, we are in the process of exploring the viability of this option to stay in business, if nothing changes. This action of ours is in sync with the President’s directive that Nigerians think outside the box, GenCos are thinking,” she assured.

She stated: “You must take cognizance of the fact that GenCos and DisCos are two major players in an industry that is complex, diverse and directly sensitive to both the economy and the people of Nigeria. And for that matter, they are at two extremes; generation and distribution, likewise the consumption.

“There have been blame games being played by the various players in the sector, it does not matter whose voice is loudest. NERC through its regulations have earmarked clearly what each of the players is entitled to. The onus now lies on NERC, the regulator to play its role as the impartial umpire to monitor and ensure efficiency. The issue of everyone crying wolf should be fast gone. The truth is, the generation companies have in keeping to the terms of their contract; generated power which has been sold by the distribution companies.

“We have a contractual relationship with the bulk trader and what we are advocating is, NBET keeps to the terms of the agreement and pay us in full. We are not debt collectors. We have kept to our own part of the bargain, notwithstanding the challenges.

“What we want is pay us our money. We do not have any contract with the Discos yet, to ask them to pay us, rather we have a contract with NBET who is the wholesaler in this market with a guarantee to pay us 100 per cent. If DisCos, who have contract with NBET has refused or is unable to pay for electricity taken and sold, by the principle of privity of contract, we are not parties hence we cannot be debt collectors. NBET should put a firm and default proof mechanism to make the Discos pay.”

According to her, the privatisation programme was to allow government to transfer public assets in the power sector to private hands, for efficiency and cost-effectiveness, saying it was not meant to portend waving a magic wand.

She highlighted that, right from inception, the GENCOs were contractually obligated to ramp up electricity generation capacity by about 5,000 megawatt MW over a five-year period. “We are in the third Year and we have an available capacity of over seven thousand megawatts if the transmission companies can transmit it,” she added.

Ogaji disclosed measures put in place by the Gencos and expectations from the federal government to grow operations in the sector, saying expansion plans are in the pipeline.

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