Residential consumers face a 14% increase in electricity tariff due to the Eligible Customer Policy introduced by the Federal Government in the power sector, power distribution companies have said.
The policy which was introduced in July, in accordance to the powers conferred by section 27 of the Electric Power Reform Act, will accelerate power supply to industry and heavy consumers said Babatunde Fashola, minister for Power, Works and Housing. He explained that the policy was to enable heavy consumers who use at least two megawatts to invest in the purchase of equipment and take power directly from generating companies that had the power.
DisCos said “ The removal of customers that are designed as ‘eligible customers’ means that the premium customers that currently cross-subsidize the largest residential customer class can be removed from the pool of DisCos customers, thereby resulting in a gap in revenue that will result in a significant tariff increase, currently estimated at 14 per cent.”
DISCOS ILLIQUID AS IT ATTRACTS LARGEST INVESTORS
Alex Okoh, the director general of the Bureau Public Enterprise said most of the DisCos are technically insolvent despite the six percent decline in spending, the electricity sector again attracted the largest share of energy investments, exceeding the oil and gas industry for the second year in a row, as the energy sector moves towards greater electrification. Mr Okoh made this known during an interactive session held at House Committee on Power, with stakeholders in Nigeria’s power sector including Electricity Distribution Companies (DisCos) and Electricity Generation Companies (GENCOs).
Electricity Distribution companies (DisCos) which serve as vendors to consumers, play a sacrosanct role in Nigeria’s power value-chain. Howbeit, DisCos struggle to stay afloat due to illiquidity and asphyxiating legal framework, still attracts the largest energy investments, globally.
NIGERIA LOSES 4,379MW TO DISTRIBUTION, GAS CONSTRAINTS
Sixteen power plants and thirty-five turbines have been turned down to forestall high frequency that could cause system collapse as Nigeria lost 4,379 megawatts (MW) capacity of electricity on Saturday. This was partly due to distribution constraints and inadequate power supply.
According to the data obtained from the business unit of the Transmission Company of Nigeria (TCN) shows 16 of the Generation Companies (GenCos) had more than one of their turbines turned down as the Distribution Companies (DisCos) could not pick 2,551MW of electricity, causing frequency variation on the grid. The drop in load demand of the DisCos hugely affected Shiroro hydro GenCo which had to cut own 365MW: Geregu Gas had three turbines turned and stopped the generation and was occasioned by frequency management.
The less affected GenCos were Omoku which only lost 20MW; Trans-Amadi which lost @8MW; and Geregu NIPP that lost 31MW. The other affected plants lost a combined 1,590MW generated power. They are Okpai, Delta GenCo, Olorunsogo NIPP, Omotosho NIPP, Egbin Jebba hydro, Ihvbor NIPP, Sapele NIPP, and Gbarain NIPP.