The Federal Government’s efforts to improve power generation and supply may remain an illusion until it puts in place a consistent regulatory framework and effective tariff mechanism, the Director, Research and Planning, Association of Nigerian Electricity Distributors (ANED), Mr. Sunday Oduntan, has said.
Speaking on a national television programme in Lagos, he said the Power, Works and Housing Minister, Babatunde Fashola, was pushing for incremental power generation in the sector, but expressed worry that the idea would face tariff and regulatory problems.
He said the increase in tariffs by the government was causing problems, adding that there would even be more problems when the government implemented its incremental power from other sources of power generation, such as solar because it would be difficult to fix the tariff.
Oduntan said: “The problem is not how and what method was used in generating electricity but the regulatory inconsistency. If we look at solar energy as a source of generating power, and the tariff imposed on consumers is not right, there would be problem. It is the people that are making policies that made power supply impossible. The Ministries, Departments and Agencies(MDAs) have not paid debts owed power firms because there is no strong regulatory programme in place.’’
He said the inability of the Federal Government to fully privatise the power was the major problem facing the industry and not shortage of gas.
He said though the sector is experiencing gas shortage, which has resulted in poor generation and supply of electricity, its major problem is faulty privatisation in which a segment of the industry was sold to the private investors while another segment was left unsold.
He said the Federal Government through the Bureau of Public Enterprises (BPE) unbundled and sold assets of Power Holding Company of Nigeria (PHCN) to private investors and left the transmission arm of the power sector unprivatised.
Oduntan said privatisation has created problems in the sector because it was not holistic. He said problems, such as obsolete transmission equipment and its attendant collapse of the national grid would not have arisen if the Transmission Company of Nigeria (TCN) was privatised.
He said when the power generation companies (GenCos) generate power,TCN was confronted with the problem of evacuating power to the areas where it is needed.
Oduntan said the inability of the Federal Government to invest in TCN over the years, has resulted in equipment decay and the consequent collapse of the national grid.
He said Sagamu and Ayobo in Ogun and Lagos states were facing transmission problems because of obsolete equipment, adding that the Sagamu Transmission Station built in 1979 is unable to transmit power to Sagamu and other towns around it.
‘’If the government had invested in TCN and also allowed it to be privatised, the story would have been different in the sector. Now, the government wants to centrally control the account of the power distribution companies (DisCos). When the government has put private enterprises in place and still wants to control the account of the entities it privatised or left a critical segment like transmission unprivatised, that is what you get. I cannot imagine the Central Bank of Nigeria (CBN) controlling account of a branch of FirstBank of Nigeria Plc in Enugu.
He said operators at the generation, distribution and transmission, the three key value chain, and the Nigerian Bulk Electricity Trading (NBET) need to work together to promote the growth of the power sector.
Oduntan said the privatisation of the telecom and the power sector is not the same because they do not follow the same process. He said the telecom industry was able to record speedy growth, because it does not have infrastructural problems unlike the power sector.
Source: The Nation