By Idowu Oyebanjo
The declaration of
eligible customers prior to the prevalence of conditions precedence as stated
in the contract between FG and DisCos became inevitable because the DisCos have
not been transparent with remittances of monies collected from consumers thereby
worsening the illiquidity crisis in the electricity market within the Nigerian
Electricity Supply Industry (NESI). In addition, DisCos have failed to invest
in customer metering and the reduction of aggregate technical, commercial and
collection losses as required by their distribution licences. Federal
Government (FG) has therefore invoked the eligibility customer clause according
to section 27 of the Electric Power Sector Reform Act (EPSRA) 2005 under
Ministerial directives.
*Idowu Oyebanjo |
One can easily
understand the FG trying to preserve the health of the sector however, the
initial reaction of the DisCos may be to cry foul. This may not be necessary as
some of the transactions will still go through DisCos and TCN. It is therefore
in order to evaluate the Strength, Weaknesses, Opportunities and Threats in
FG’s decision to allow GenCos to sell electricity “directly” to four categories
of customers with average monthly consumption of 2MW and connected to the
medium and high voltage segments of the electricity network. This in my opinion
should be described as customers with minimum Authorised Supply Capacity (ASC)
of 2MVA. This is equivalent to a consumption of 100 Amperes (unit of current)
at 11kV
*Strength
By declaring the
eligible customers, Nigeria ’s
privatisation addresses the myth around subjecting a “natural monopoly” to
economic regulation rather than competition in a privatised electricity supply
industry by deepening competition in the electricity market of natural
monopolies. Such competition or liberalisation will force the existing 11
DisCos to improve their operational efficiency and customer service. This will
become a reference wherever matters of electricity regulation are being
discussed in the world of power systems.
The advent of
Distributed Generation and bringing of generation close to consumers will help
to improve the liquidity of the electricity market and achieve the desired
reduction in network losses more quickly if the scheme is properly implemented.