More blackouts face Nigerians over load rejection by DisCos
Story from Abah ADAH, Abuja
There are indications that Nigerians will experience more power outages in the days ahead as the electricity distribution companies (DisCos) continue to reject loads.
A source within the operational circle of the Nigerian Electricity Supply Industry (NESI) who in our correspondent revealed that most of the DisCos were rejecting loads in order not to further incur the costs as they are already highly indebted and bankrupt.
Recall that the Transmission Company of Nigeria (TCN) recently ordered the shutting down of two thermal plants, the 504mw Alaoji Power Station and the 336mw Olorunsogo, both of which are owned and managed by government-funded Niger Delta Power Holding Company (NDPHC), according to reports.
READ ALSO: NDPHC shuts down Alaoji Power Plant over vandalised TotalEnergies pipeline
“As a result of this ugly trend, the System Operator (TCN) from to time keeps asking certain generation companies who must have committed huge resources in the process to ramp down or stop putting the load on the grid as a precautionary measure towards safeguarding the grid against collapse,” the source said, adding that people don’t get to know about this because it is not brought to public notice and the generation companies.
According to the source, the bankruptcy of the DisCos escalated following the approval of the Extraordinary Review of the Multi-Year Tariff Order (MYTO) of Ist February 2022 by the Nigerian Electricity Regulatory Commission (NERC).
Part of a report sighted read: “On 1st February 2022, an Extraordinary Review Multi-Year Tariff Order was issued by NERC. The Order brought tariffs to cost-reflective levels for 7nos out of 11nos Discos (Abuja, Enugu, Ibadan, Kaduna, Kano, Eko and Ikeja). Consequently, the Minimum Remittance levels for these 7nos DisCos, was brought to 100%.
“The Extraordinary Review of the Multi-Year Tariff Order of Ist February 2022, also imposed more stringent Aggregate Technical, Commercial and Collection (ATC&C) losses on 11 nos DisCos, in line with the Loss trajectory of the Performance Agreements. These ATC&C losses are significantly lower than the ATC&C losses estimated by the DisCos.
“Additionally, the CBN-PAF loan has been used in supplementing the market shortfalls was retired and replaced with the World Bank PSRO ($750mIn loan) and Budget Appropriations-where necessary, as part of the Power Sector Recovery Programme. The World Bank PSRO loan has more stringent performance-based disbursement conditions.
“These shifts have increased the NESI Market shortfall deficits, significantly.
“These structural shifts, are magnified by the emerging Global and Nigerian economic position, occasioned by a post-COVID and Russia vs. Ukraine military situation.”
According to the source, the country’s power supply situation would get worse in the days ahead as the federal government is busy allocating intervention monies in the name of upgrading transmission without looking at the root of the crisis – the DisCos helpless situation.
Recall that the federal government had provided intervention funds running into trillions of naira in the last couple of years without any result, and at the last meeting of the Federal Executive Council (FEC) on Wednesday 27 April 2022, N1.4 billion was approved for the supply of more equipment for the Transmission Company of Nigeria (TCN) to boost electricity supply across the country.
The Minister of Power, Mr Abubakar Aliyu, made this known when he briefed State House Correspondents on the outcome of the meeting of the council, presided by President Muhammadu Buhari after the meeting.
The source was of the opinion that urgent equity recapitalisation of the 11 DisCos even to the tune of about 40% should be looked into to save the electricity market from total collapse.
This is as the Nigerian Labour Congress (NLC) in its Easter message called on the federal government to scrap the privatisation of the power sector over the quagmire in the sector that has continued to subject Nigerians to an unprecedented level of epileptic supply, almost a decade after the privatisation.
The NLC stated that since the privatisation of the power generation and distribution assets in Nigeria, the promise of a constant supply of electricity remains a mirage.
Some 9 years ago, 1st November 2013 to be precise, the Federal Government of Nigeria privatised the generation (upstream) and distribution (downstream) segments of the power sector which was hitherto owned and managed by the government-owned Power Hold Company of Nigeria (PHCN), the direct successor of Nigeria Electric Power Authority (NEPA). Since then, the hope of uninterrupted quality and stable power supply in the country which informed the privatisation had been elusive.
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