New Owners of Power Firms Complain of Challenges

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Barely 27 days after taking over the operations of successor generation and distribution companies of the defunct Power Holding Company of Nigeria (PHCN), core investors of the privatised firms have finally come up with complaints over the actual operational challenges facing them.
They made their complaints known to the Nigerian Electricity Regulatory Commission (NERC) at a meeting yesterday in Abuja.
The meeting was the first since they were physically handed over their electricity assets by the federal government on November 1.
According to them, their reality checks on the power systems they took over indicated that the system seems to be “upside down.”
One of such investors who expressed his discovery is  the Managing Director of Kano Electricity Distribution Company, Dr. Jamil Gwamna. He said the market rules, especially with regards to the Multi Year Tariff Order (MYTO-2) had been turned upside down.
Gwamna said: “In terms of complying with rules especially those in MYTO, the reality on the ground in Kano Disco is that all the assumptions in the MYTO model have been turned upside down. Load allocation to Kano is so bad that for the last three days we are getting as low as 40 megawatts (MW) to cover Kano, Jigawa and Katsina States. Not only that, about 20MW goes to Niger Republic.
"How on earth will I make money? We are not even near the assumption of MYTO because MYTO says I should be allocated eight per cent of the total generation capacity, which means if the generation is 2,000MW, Kano should be allocated at least 160MW. Yesterday, our allocation was 80MW and out of that 25MW is going to Niger Republic. So, I think these are serious issues which we have found on the ground and they should be addressed urgently.”
Also, the Managing Director of Benin Distribution Company, Funke Osibodu, said: “There is confusion in the public and we have to as a group address the confusion in the public. For instance, the public believe that they are not supposed to pay their bills until January, they believe that the debt they owed before should be written off and that they should stand in front of you and collect free meters.”
“In the past couple of weeks, there have been problems nationwide. The public now believe that when they don’t have power, the new owners do not know what they are doing when in reality it is because of lack of gas,” Osibodu added.
Other officials who spoke on behalf of Egbin and Geregu power plants accused the Market Operator (MO) and System Operator of the Transmission Company of Nigeria (TCN) of not adhering to the MYTO-2 agreements and provisions in the interim rules, stating that the MO does not use the official rate stipulated in the interim rules.
However, the Chairman of NERC, Dr. Sam Amadi, in his response, assured that all issues raised would be addressed by the regulator, adding that the essence of calling the meeting was to bring the operators together to craft out interventions that will address the problems.
He said Yola and Kano distribution companies have perennially had low power allocation problem, stating that although the MYTO-2 provides for a particular allocation to all distribution companies, they are not getting enough power to supply.
Part of the reasons he said, are based on transmission while some are based on capacity of the distribution companies to receive.
He said the regulator will look at the commercial framework and find ways of ensuring that the concerned distribution company that is receiving less power is also to have their revenue to service their operation.
Meanwhile, the Transmission Company of Nigeria (TCN) yesterday announced that the nation’s power generation now hovers between 3,800 mega watts and 4,000 mega watts.
TCN General Manager, Public Affairs, Mrs. Seun Olagunju, disclosed this to the News Agency of Nigeria (NAN) in a telephone interview.
She said the restoration of power to 4,000 mega watts followed the repairs of the vandalised pipeline supplying gas to Okpai power plant in Delta State.
Olagunju said the 450 megawatts from Okpai power plant lost during the period of the damage had been returned into the national grid since Monday.
She reassured Nigerians that power supply would be stable after the completion of repair work on the gas pipelines.
The TCN spokesperson reiterated the federal government’s determination to improve power supply across the country.
She said the federal government was also collaborating with states to implement the National Integrated Power Projects (NIPP).
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