The Nigerian Electricity Regulatory Commission and investors in the privatised power companies on Wednesday agreed to ask the Federal Government to postpone the March 1, 2014 date for the declaration of the Transitional Electricity Market.
If the TEM is declared, it will make it compulsory for the Nigerian Gas Company, a subsidiary of the Nigerian National Petroleum Corporation, to be sanctioned if it fails to deliver on its gas supply commitments to power generation firms in line with the Gas Supply Agreement signed by both parties in 2013.
With the declaration of the TEM, any power generating company that does not keep to its electricity supply commitment to the national grid as stipulated in the Power Purchase Agreement signed with the Nigerian Bulk Electricity Trading Plc will also be sanctioned.
During a press briefing at the headquarters of the commission in Abuja, the Chairman/Chief Executive Officer, NERC, Dr. Sam Amadi, said it would be unrealistic to declare the TEM on March 1, 2014 as earlier scheduled.
Amadi, who spoke alongside the representatives of the chief executive officers of the power generation and distribution companies and the Transmission Company of Nigeria, stated that it was agreed that the TEM should not be declared because some of the conditions that should be met before its declaration had not been achieved.
He said, “The CEOs, during our meeting, agreed with NERC’s submission that it will not be realistic to declare the TEM next month because of the fact that some of the market and non-market conditions precedent have yet to be finally resolved. Particularly are the issues of losses that are being reviewed and the issue of tariff.
“So, we have agreed to go to the minister and declare that NERC will review the interim rules and get back to the CEOs at the next meeting; and then, we will amend the rules. But then, the TEM should not be declared until when we have met all the conditions.”
Speaking on behalf of the power generating companies, the Managing Director/Chief Executive Officer, Egbin Power Plc, Mr. Mike Nzoigwe, said power generation in the country, which had dropped below 3,500 megawatts in recent months, had improved appreciably.
He said, “The capacity for generation has increased. In the last one week, we have bounced back to beyond 4,000MW.
“We actually recorded over 4,200MW in the first day we got (gas) supply, and I am sure that in a very short time, we are going to exceed the boundary that we attained in the past, which was about 4,500MW.”
Nzoigwe urged Nigerians to stop bypassing electricity meters, stressing that the development could drag the power firms backward.
The representative of the power distribution firms and Managing Director/Chief Executive Officer, Benin Electricity Distribution Company, Mrs. Funke Osibodu, said the Discos would commence customer enumeration soon.
“There is a need for us to go after what we call customer enumeration and the NERC has sent a guideline to all of us. We will go from door to door to try and know the customers. This is because a lot of customers deliberately go on wrong classification,” she said.
The Managing Director/Chief Executive Officer, TCN, Mr. Mack Kast, said about $1.5bn would be invested annually in transmission infrastructure in order to boost its efficiency.
Kast said, “We are working very hard and are focused on expanding the system, and to do that, we need more cash. What is significant is that on Monday, this week, we had a very successful investors’ conference on power and the TCN is in the position or is probably going to need to invest in the neighbourhood of about $1.5bn per year to continue to upgrade and increase the capacity of the infrastructure that we have.
“We expect that by 2017, we should be able to evacuate up to 14 gigawatts of power and increase to probably 20GW by the year 2020.”