The electricity Generation Companies (GenCos) on Monday urged the Nigeria Electricity Regulatory Commission (NERC) to classify the stranded 2,000Mega Watts as part of the available generation capacity in the Nigerian Electricity Supply Industry (NESI).
The commission, according to its presentation on the review of the Multi-Year Tariff Order (MYTO) methodology by Senior Manager, Market and Rate, Abbah Tera, takes generation capacity as one of the criteria for review of tariff.
Responding to the presentation, the Executive Secretary, Association of Power Generation Companies (APGC), Mrs. Joy Ogaji, said that that the stranded capacity is not utilized does not mean that it is not produced by the generation companies.
She noted that there is enough gas but the only constraint its cost, stressing that the GenCos should not suffer owing to the stranded power.
Her words: “We are not saying we don’t have enough generation. The only constraint that Nigeria is having is the cost of gas. We have over 2,000MW sitting. The over 2,000Mw should be treated, it is available. GenCos should not suffer for it . In line with the review NERC should capture the stranded capacity.”
Some of the stakeholders urged the commission to privatize the Transmission Company of Nigeria (TCN) since it is obvious that the Federal Government which operates has proven inefficient.
The Commissioner of Engineering Performance and Monitoring, Prof. Frank Okafor, however explained that the cost of funding the transmission network is too enormous for a private company to raise for the operation of the system.
“It will be difficult to get investors that will fund the TCN,” he submitted.
Besides, he said that it might be difficult to secure the right of way for the network since it transverse so many states of the federation.
According to him, government is borrowing from multilateral financial agencies to expand the grid since the amount of power delivery is not sufficient to raise the required revenue.
The commission maintained that it has met with the TCN and DisCos in order to deliver the stranded power to consumers.
Owing to the appreciation of stranded generation, NERC said that Minister of Power, Works and Housing, Babatunde Fashola has directed it to sell power to eligible customers.
NERC however informed the stakeholders that it has already got the go ahead to enact a regulation that will encourage willing seller and willing buyer of electricity.
NERC Vice President pointed out that the event was not for a tariff increase but for the commission to get stakeholders’ inputs on (the frequency of the review) how often the review should be carried out.
The stakeholders were also divided on whether the tariff should be reviewed bi-annually, monthly or yearly.
NERC carries out a major review tariff review every five years and minor review every six months.
But speaking representative of Mainstream Energy, Solutions Limited, Musa Abba Bajoga, asked the commission to following the global practice to “do what is done universally.”
The President Hotel Owners Association of Nigeria, Dr. Ezeh Udeh told the commission to consider a yearly review since hotel rates are not reviewed monthly and that any price that rises in the country hardly falls.
Network of Electricity Consumers Advocacy of Nigeria (NECAN), Tommy Akingbogun, told the commission not to use its rate to kill investors.
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