The Federal Government has instructed the Nigerian Electricity Regulatory Commission (NERC) to revoke the licenses of electricity distribution companies (DISCOs) that are not meeting performance expectations.
Power generation in March 2024 experienced a year-on-year decline of 21%, dropping to 3,475 MW from 4,404 MW recorded in the same period in 2023. This decrease can be attributed to various challenges, notably low investment and insufficient gas supply.
However, on a month-on-month basis, power generation decreased to 3,475 megawatts (MW) in March 2024 from 4,043 MW in February 2024, leading several Electricity Distribution Companies (DISCOs) to implement load shedding measures.
Data from the National System Operator, a unit within the Transmission Company of Nigeria (TCN), revealed that supply remains inadequate, adversely affecting households and businesses nationwide.
The government rebuked the DISCOs for their inability to improve supply despite the presence of power on the national grid.
During a meeting in Abuja, Minister of Power Adebayo Adelabu underscored that the distribution segment remains the most vulnerable link in the electricity supply value chain.
He recommended that the Nigerian Electricity Regulatory Commission (NERC) investigate novel approaches to incentivise DISCOs to improve supply, such as imposing stringent penalties on utilities that do not utilise their allocations and potentially revoking licenses altogether.
He asserted that the franchise areas serviced by the DISCOs were overly expansive, and emphasised the government’s commitment to pursuing a restructuring initiative aimed at establishing smaller DISCOs, with each company confined to operating within a single state.
“Distribution is our weakest point and it is the closest to the consumers. If we don’t get distribution right to Nigerians, we’re not doing anything.
“So, efforts need to be put on this. In fact, we must intensify our efforts in ensuring that we address all issues relating to distribution.
“It is true that the distribution companies are in the hands of the private sector. We don’t have direct control. But we need to compel them for performance.
“They must perform. If they do not perform, all our effort in generation in transmission is zero. I’ve also had a meeting with the Chairman of NERC on how we’re going to address these performance issues of the electricity distribution companies across the nation.
“Why we have new policies in our power sector policy framework, which we’re going to finalise to address long-term issues in distribution, we must proffer short-term solutions to the lingering crisis.
“Before we get to that, we’re talking about the issue of the capitalisation of the discourse, for them to inject funds to improve infrastructure.”
“We are talking about issues of restructuring the DISCOs along state lines, to make them manageable in size. Also, issuing new franchises to smaller DisCos to take over areas not being served by the existing ones or that have been underserved by the existing ones.
“I’ve said it before now that non performance of DISCOs in terms of epileptic power supply qualifies as a basis for revocation of license. Any DISCO that is found-wanting will be severely dealt with because their actions or inactions directly affect the performance of the sector.”
The Minister highlighted that any deliberate refusal by a DISCO to accept available power constitutes grounds for the potential revocation of licenses.
He further stressed the imperative for distribution companies to be prepared to uptake 90–99 percent of their allocated load.
Labelling the ongoing electricity rationing nationwide as intolerable, he revealed the government’s intentions to bolster power generation from the current 4,000 MW to 6,000 MW within the next six months.
This endeavour, he explained, would involve settling significant debts owed to power generation companies and gas suppliers.
“So what we are looking at is to have an agreement to ramp up to a minimum of 6,000 megawatts within the next three to six months.
“I know that the highest we ever generated was 5,700, about three years ago. That was specifically November 2021.
“And this 5,700 was also distributed. If we could achieve 5,700 at that time, I believe we still have infrastructure to generate between 6,000 and 6,500. In terms of the generating companies, I have no doubt in my mind that the existing capacity can give us 6,500 once there is stability in supply of gas.
“I’ve been to a number of the generating companies and I confirmed that they have this installed capacity.
“So, what we are aiming for is to establish an agreement to escalate power generation to a minimum of 6,000 megawatts within the next three to six months.
“I am aware that the highest capacity we ever achieved was 5,700 megawatts, approximately three years ago, specifically in November 2021.
“This peak of 5,700 megawatts was also effectively distributed. If we were able to attain 5,700 megawatts at that time, I am confident that we still possess the infrastructure to generate between 6,000 and 6,500 megawatts.
“Regarding the generating companies, I have no doubts that the existing capacity can deliver 6,500 megawatts once there is stability in the supply of gas.
“I have personally visited several of the generating companies and verified that they have the installed capacity.
“A significant portion of this installed capacity is operational, but it remains underutilised due to low or inadequate gas supply. Once the gas supply is secured, our objective is to increase generation to a minimum of 6,000 megawatts.”
He emphasised that while the Federal Government intends to persist with electricity subsidies in the short term, there are plans to gradually eliminate them over the next three years and transition the sector towards a tariff structure driven by commercial viability.
Following the meeting, Engr. Sule Abdulaziz, the Managing Director of the Transmission Company of Nigeria, spoke to journalists and clarified that the fire incident at its substation in Kano occurred while engineers were attempting to rectify a leakage issue in one of its transformers.
ALSO READ: Nigeria’s forex inflow increases as diaspora remittances hit $1.3 billion