Any keen observer in the power sector will have heard of the impending plans to enact eligible ‘bye-laws on certain customers. Meaning some maximum demand customers will now be able to buy powers directly from the GenCos, bypassing the DisCos.
Now the Power generation companies (Gencos) in Nigeria have said the eligible customers’ regulation recently passed into operation by the Nigerian Electricity Regulatory Commission (NERC) has the potential to break the monopolistic tendencies of the 11 electricity distribution companies (Discos).
The Gencos said in a recent statement from their umbrella body – Association of Power Generation Companies (APGC) that the regulation would infuse in the country’s power market, the kind of competition it needs to develop into a full-fledged contract-based market.
Executive Secretary of APGC, Dr. Joy Ogaji, spoke extensively about the subject while in Abuja, stating that the new regulation offered the market an opportunity to break away from the monopolistic entities it inferred the Discos had become.
“With stranded generation capacity in the electricity market and poor market liquidity, declaration of eligible customer is the brilliant way to liberate the electricity sector from current monopoly,”
“Confer on consumers, power to choose energy supplier and creates a more efficient electricity market, stimulate investment in the electricity sector since generators can sign long term contracts, deliver lower prices, enhanced service performance, and new service offerings for small consumers through competition, and send a powerful signal that the electricity sector is evolving towards full retail competition.”
Dr Ogaji further believes this will:
“Allow a greater variety of suppliers to find innovative ways of discovering and providing what different groups of customers want in economical ways, promote national economic development through supply of electricity to the productive sector of the economy, support economies of scale through bulk purchase of electricity, reduce technical and non-technical losses for bulk high voltage supply, and reduce financial risk by supplying credit worthy eligible consumers”
While her points are certainly quite valid, you can’t help but wonder if they are more motivated by her obvious standing in this situation. The GenCos are the obvious winners with this newly proposed structure, and Dr. Ogaji, who is the Executive Secretary of APCC is certainly an advocate for this cause. She further added saying that:
“The presence of retailers, or the mere possibility of future competition will force existing distributors to establish appropriate customer services and commercial divisions,”