Perform or quit, FG orders DisCos owners

July 10th, 2018

-Owe NBET debt rises to N500bn

By Obas Esiedesa

The Federal Government yesterday took a dim view of the performance of the Electricity Distribution Companies (DisCos) since privatization on November 1, 2013, and ordered the owners to perform or quit the sector for those who are ready to compete.

The Minister of Power, Works and Housing, Mr. Babatunde Fashola told journalists in Abuja however that despite the poor performance of the DisCos the government was not looking to take back the utilities.

The Minister said the companies’ market remittance of revenues collected has remained at an abysmal 15 percent which has increased their indebtedness to the Nigeria Bulk Electricity Trader (NBET) to N500 billion.

He explained that while the government has worked hard in the past few years to increase power generation to 7,000 Mega Watts, the distribution companies have failed to improve their capacity to distribute the available power leaving about 2,000MW of power stranded.

He said efforts to distribute the stranded power directly to the consumers were being frustrated by the DisCos.

Fashola therefore directed the Nigeria Electricity Regulatory Commission (NERC) to enforce the terms of the agreement with the DisCos including the granting of licences to other operators for areas where the Discos were unable to provide services to.

He said government will not be held back by the inability of the DisCos to distribute power to consumers, pointing out that the distribution companies do not have the exclusive rights to distribute electricity in the 11 network areas of the country.

He said: “It must be obvious to the ordinary person that the supply of power is now a private business in the hands of private operators and in the final end, in the hands of the Discos.

“But because of the critical and sensitive nature of power supply, government has not left the supply solely. Government at federal, state and local government, as well as former employees of PHCN hold 40 per cent of the shares in the Discos.

“In addition, government is responsible for regulating the behaviour and compliance through the NERC which is like what the Central Bank is to the banking sector,” he explained.

According to him, “The law does not make it mandatory for any Nigerian to receive power from the Disco or to use only public power, that is why it is not an offence for Nigerians to buy generators, inverters or solar systems which are of course more expensive than the power which NBET buys from the Gencos to vest to the Discos to distribute to customers.

“It is the Discos who are service providers that you should turn to when you have questions about transformer collapse and metering.

“As it is now obvious, from 2016 when the Discos complained about lack of power to distribute, the problem today is that the Discos cannot distribute all of the power that is available, leaving the sector with an unused capacity of 2000 megawatts approximately.”

He expressed the determination of government to boost power supply to households and businesses across the country, insisting that “Government must act, and will do so. The Discos bought these assets with their eyes opened, and they must compete to deliver or exit”.

He said small businesses need power but cannot get enough because the Discos’ failure, just as he claimed that the investment of Gencos were threatened because they cannot utilise the capacity they have installed.

According to him, none of the Discos have an exclusive distribution license and as such could not stop NERC from issuing new licenses in the network areas they cover.

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