The Power Supply Conundrum

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The Minister of Power, Works and Housing, Mr. Babatunde Raji Fashola, SAN,  said last week that due to system collapse at two of the nation’s power plants, electricity generation had dropped to 3,400MW. He promised to restore generation to 4,000 MW within six days. That didn’t happen as darkness enveloped the country at a time of intense heat. Even now, the power situation remains epileptic and government appears at its wits end on the solution to the daunting challenge.

Fashola spoke about funding issues, obsolete infrastructure, inadequate gas supply due to vandalism and huge debt burden and low water levels at hydro power stations. He said government was set to tackle these problems with its power recovery plan and power sector reforms, which he explained would sanitise the sector and make it attractive to investors. Stripped of his brilliance and grasp of the sector’s challenges, what is left of Fashola’s epic interview is cynicism. Actually he said nothing new. Past governments have stated the same problems: inadequate funding; infrastructure decay; gas pipeline vandalism and huge public sector debts.

To say that the power sector has been a national challenge is an understatement. After the federal government had invested about N2.7 trillion in the sector without success, it opted for privatisation. But ever since the sector was handed over to private investors in 2013, not much positive results have been posted as power generation has hovered around 4,000MW. Besides, transmission and distribution have been lagging with the distribution companies unable to do more than 3,000MW at best of times because of weak distribution infrastructure occasioned by inadequate financing to upgrade their equipment.

Two years ago, the Central Bank of Nigeria (CBN) intervened with a N213 billion Nigeria Electricity Market Stabilisation Facility for the operators within the sector. The government also raised prices paid by electricity consumers under the Multi-Year Tariff Order (MYTO), introduced in June 2012 to gradually make tariffs more cost-reflective to encourage private investment. The latest adjustment in the current MYTO (2015‑2024), which took effect on February 1, 2015 raised prices by an average of 45%. This too would appear not to have brought succour to the problematic sector as power supply remained epileptic.

Nigerians were told that the reason for the palpable failure to provide them electricity was the inefficiency of the public sector that was operating it and that with private sector investment and control, power supply would look up. Unfortunately, that has not happened. More disappointing is the evident impotence of the government to chart a way out of the obvious conundrum that the sector has found itself.

Although government plans another N701 billion intervention fund for the sector, we think, however, that throwing money at the sector is no solution as there are governance and regulatory issues that would have to be sorted out before the nation can begin to make some headway. Meanwhile, the Nigeria Electricity Regulatory Commission (NERC) that should tackle these issues is largely comatose as it has no chairman since the last board was dissolved almost two years ago.

The federal government, therefore, needs to urgently appoint a chairman for the NERC so that the commission could set about dealing squarely with the naughty issues that have kept the sector on its knees. What Nigerians demand, and deserve, are megawatts of electricity, not megawatts of excuses.

 Source: ThisDay
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