The New Challenge in Nigeria’s Electricity Distribution

The New Challenge in Nigeria’s Electricity Distribution

The controversy surrounding the Nigerian power sector continues to take turns. On Tuesday, the Senate asked the Federal Government to review the privatization policy of the power sector. The upper house of the national assembly said the current arrangement of the power sector needs to be redesigned as it lacks efficiency and the structure that would provide constant power supply to Nigeria.

The senate president said that if things continue the way they are, Nigerians will not be able to enjoy stable power supply in 10 years.

The motion which was moved by Senator Gabriel Suswam was largely backed by members of the red chamber. The power sector recovery plan has been a subject of discussion in the national assembly that its end seems far from near.

Lawan said the Discos have shown incapability to supply Nigerians with constant electricity, and therefore should not be allowed to continue to run the electricity business in their current capacity.

“We gave power to them, (GenCos and DisCos) and they still come to the public to ask for funds. I think it’s time for Nigeria to consider reversing the privatization of the power sector or they should just cancel the entire privatization process completely. If we leave it, we may not have power in another 10 years.

“The privatization of the power sector has so far, not been successful. We expected efficiency and effectiveness in the power supply. The DisCos have no capacity to supply us power. The GenCos have challenges too. It is not a good commentary that we should continue to give them money. They’re private businesses. We need to review this privatization.

“Our committee needs to investigate trillions spent. That’s a lot of money. Try to find out what has happened so far. Government needs to look at this whole thing. There is lack of capital, lack of investment. We feel very bad because we have no electricity and the country is suffering,” Lawan said.

This is the second time in the year that the senate is calling for review of the privatization policy of DisCos. In February, the senate president said the underperformance of the power sector can no longer be tolerated as it keeps deteriorating on the daily. He said the distribution policy of the power sector should be reviewed if not the entire sector.

The major reason for this call by the senate was found in the statement of the power Minister, Sale Mamman, in February. He said that the distribution companies can only transmit a fraction of generated power, which leaves many of the end-users in darkness.

Mamman said that out of the 13,000 megawatts capacity of power, the DisCos can only distribute about 4,500, and only 3,000 megawatts get to consumers. In view of the situation, he backed the call to review the entire process that brought in the present companies. “Companies that are incapable of running the distributors should give way to whoever that is ready to come and invest he said,” he said.

But in reaction, the Nigeria Electricity Regulatory Commission (NERC) warned the lawmakers against revisiting the privatization policy. The acting Chairman, Dr. Anthony Akah, said the Nigerian government may not have the funds to buy back the utilities and may be acting in contravention of the agreement binding the owners of the distribution companies and the federal government, and it will send a bad signal to investors.

Akah, however, acknowledged that the DisCos have fallen short of the electricity transmission level they signed to deliver. He said they are working to up their game.

“The Commission has identified that the remittance by the electricity distribution companies’ level is too and it is totally unacceptable to us. The Commission would soon introduce regulatory mechanism to redress this remittance abnormality,” he said.

It’s been three months now and the story remains the same. Nigeria has invested over N1 trillion in the power sector with little to show for it. Electricity distribution can only reach about 60% of Nigerian households, and it is not constant.

Before now, the problem had largely centered on power generation. But as power generation increases, it shifts to distribution. The inability of the distribution companies to transmit electricity according to the generation capacity of the GenCos has introduced a new challenge to the power sector.

On Tuesday, the Minister of Power announced that the director of Transition Company of Nigeria (TCN), Usman Mohammed has been sacked. The development followed a series of controversies that have trailed the Company, undermining the power sector reform goals.

Unfortunately, the story sounds the same from the past despite huge resources that have been channeled to the power sector, and there appears to be a little hope for stable power supply for now.

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