On Wednesday while speaking at an investigative hearing by the House committee on power, Hon. Yakubu Dogara, the speaker of the House of Representatives reiterated the commitment of the green chamber to utilizing every necessary legislative tool in solving the challenges bedeviling the power sector. And also talked about the need to save the electricity market environment of the Ibadan Electricity Distribution Company (IBDEC). He emphasized the importance of a working power sector, especially with regards to economic activities and poverty alleviation. Dogara stated that the hearing was convened following a motion alleging unlawful acts against IBEDC by the Nigerian Electricity Regulatory Commission (NERC), and made reference to previous legislative actions on similar issues. He added it demonstrates the commitment of the House to streamlining the operations of agencies in the power sector for optimum service delivery.
Power distributors disown Fashola’s N800 billion debt claim
The illiquidity follows the inability of the power distribution companies to defray over N800 billion worth of invoices regularly served to them by government deal brokers in the Nigerian Electricity Supply Industry (NESI) as the value of power supplied to them from generating companies. The distribution companies, apart from declaring that the bulk of the unpaid invoices were served traditional debtors including government ministries, departments and agencies (MDAs) that form the most rascally customers, pointed out that the bill showcases the scale of tariff imbalance and disparity between the open market price for power and prevailing regulated price. Mr. Sunday Odutan stated the debt claimed by the minister does not have a foundation in the prevailing tariff structure approved by the government for implementation in the Industry.
Liquidity Crisis Persists Despite N701 Billion Power Sector Intervention Fund
Funding challenges still persist despite approval by the Federal Executive Council (FEC), for an N701 billion Central Bank of Nigeria (CBN) facility to ameliorate liquidity crisis in the power sector. Unfortunately, more than a year after the approval, targets have not been met, in particular, electricity Generation Companies (GenCos) are still unable to pay their gas suppliers. FEC, in March last year, approved N701 billion as Payment Assurance Guarantee, to help GenCos meet the gas payment obligation.
The Minister of power works, and housing, Babatunde Fashola stated that the liquidity problems affected the Nigeria Bulk Electricity Trading (NBET’s) ability to deliver on its Power Purchase Agreement (PPA) obligations to the GenCos, hence the approval of the assurance guarantee.