Discos to Make Position on ‘Eligible Customer’ Public Soon – ANED

In the wake of recent declaration of ‘Eligible Customer’ status by the Federal Government, electricity distribution companies say they will support any policy of government that strengthens the Nigerian Electricity Supply Industry (NESI).
The Minister of Power, Works and Housing, Babatunde Fashola had declared the eligible customer status which allows big power consumers to get supplies directly from power generation companies.
The decision came amid controversy over the of plan by the government to centralise the revenue accounts of the sector, moving away from individual accounts kept by distribution companies on behalf of the sector operators.
Speaking to The AUTHORITY yesterday, the Chief Executive Officer of the Association of Nigerian Electricity Distributors, Azu Obiaya said the impact of the eligibility customer policy on their operation is still being examined.
He said Discos were not worried about the policy but would make their position known after the study.
He said: “For us it is under review. Our members are still looking at it to determine what the impact will be. But having said that, we are all for anything that makes the market more efficient and more sustainable.
“We will provide response as soon as we finish our review on the impact on our business”.
Despite the recent policies that seemed targeted at the Discos, Mr. Azu said it will continue to support the government effort to bring power to consumers.
According to him, “We recognize that it is a young market. It is place where we, as a nation has never been before. What we are asking is that we work in partnership so that we can essentially work towards achieving the government objective of reform of the sector and 24/7 power supply for the nation”.
Obiaya who acknowledged that the road to reforming the power sector is a difficult one, said distribution companies were ready work together with other stakeholders to improve the sector.
He debunked the notion in the sector that the Discos are the weak link, noting that there are challenges all through the value chain.
“There are multiple problems along the value chain not just at the retail end”, he stated.
Meanwhile, the new policy has received the backing of Nextier Power, which stated that the policy would expand the ability of Gencos to sell power to other big consumers beside the Discos.
Nextier Power in statement by Emeka Okpukpara Jr, noted that there are benefits to gained in the eligible customer declaration.
“For example, if the Federal Government decides to stop signing (Power Purchase Agreements (PPAs) today (which presents significant financial exposure and risk to the government) and focus on getting the framework and implementation of eligibility right, then the sector will be driven towards efficiency and longer-term development.
“One fact about this declaration is that it is one big piece of the puzzle that is essential to fully unlock the wholesale market towards retail competitions. Without much excitement, this powerful one-page declaration will still require a lot of clarification such as – getting clarity on who defines eligibility, identifying the number potential eligible customers there are and more”.
The firm added: “Without a doubt, there could be negative effects in the short term for different players in the value chain. This could be a powerful tool to be used as a wakeup call for some players in the value chain once the implications of this declaration is closely assessed by everyone. There could be negative effects also with regards to tariff implications (and a possible increase) for some customers. Notwithstanding, it has the potential to incredibly grow the market depending on how effective the framework and implementation is”.
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