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Why darkness may persist in your homes for now

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power plantsThe Nigerian public is never a greedy type. Whenever office-seeking campaigners come calling, the list they are presented with across the country is similar: fix power, build roads, provide portable water, create access to health and education.

Of all the demands of the people, electricity has been the promise public officers find most difficult to handle, even half-way. This is simple. Power is peculiar. Unlike the other aspects of life where a little effort could be noticeable, power is only available when 100 per cent complete. No aspect of power can be showcased until taken to 100 per cent completion.

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But the enthusiasm of public office holders has never been lacking. The revered Cisero of Esa Oke, Chief Bola Ige, was once quoted as promising to turn stone to bread upon his appointment as Minister of Power by the government of President Olusegun Obasanjo. The story of darkness survived his stay in that office.

Incumbent Minister of Power, Babatunde Raji Fashola, SAN, was equally quoted in the heat of 2015 campaign as saying that a serious government would fix power in Nigeria in six months. This November marks his third year in office!

I‘ve been on the train of the National Assembly Power Committee’s visits to major power installations across the country in recent times. But each station you get to, there are different stories.  There are stories of rot, neglect, underutilisation of capacity and lack of it.  A power expert described the situation as “the more you see the less you understand.”

In a chat with the chairman, Senate Committee on Power, Steel Development and Metallurgy, Senator Enyinnaya Abaribe, a first class graduate of Economics from the University of Benin and a voracious reader, the former University Teacher summed things up simply: “For all have sinned.”

It looked like the man was throwing a big puzzle out there but the message was succinct enough: All stakeholders have got a share of the blame; the Federal Government; the Generation Companies and the Distribution Companies and their staff, the Bureau of Public Enterprises, and the regulatory Nigerian Electric Regulatory Commission (NERC). The solution, he said, lies in everyone coming to the table with clean hands.

Some may blame the Obasanjo government for failing to fix the rot in that sector in eight years. But that government has to take credit for laying the foundation for the present conversation of stable electricity in Nigeria through the passage of the Power Sector Reform Act into law and the creation of the Power Holding Company of Nigeria (PHCN).

Next, the Goodluck Jonathan’s administration took the bold step of privatising the power assets.  Power Generation Companies (GENCOS) and Power Distribution Companies (DISCOS) were transferred to new owners in competitive biddings which were hailed by the World Bank as a great success. Like Abaribe himself would agree, the decision to sell off 60 per cent of the power assets by the Federal Government was a step in the right decision. The fact that the Federal Government of Nigeria is holding on to 40 per cent of the equities in those assets also means that the government has forestalled the possibility of monopolies taking over those assets and using any of them to threaten national security (a present and ringing concern at the federal level).

Checks I have undertaken across the country indicate that the generation side of the power business is doing fine. The regeneration started with Obasanjo building some power plants and Jonathan adding transmission projects and power plants as well. The Transmission Company of Nigeria (TCN) looks to be doing well in its different locations. In Kaduna for instance, evacuation of generated power is an issue. Not up to 50 per cent of the available power is evacuated.  At the 132/33KV Transformer in Ejigbo, Lagos, only 30 per cent of the available power is evacuated by the DISCOS. And since power is not what you put on the shelves, it means energy waste in many fronts.

Right now, the current administration is working to complete inherited power projects including the 215 MW Kaduna Power Plants, the 700MW Zungeru Hydro power plant, Afam and the Mambilla Power plants. All that would all to the generation capabilities of the country. But will that solve the problem? No, not really.

While it certainly appears that the upstream sector (generation) of power is improving steadily, the same cannot be said of the downstream (distribution) sector.  A key aspect of the problem is the Service Level Agreement signed into by all parties at the point of takeover by the successor companies to PHCN. The Federal Government transferred the assets to DISCOS at N198 to the US dollar, it also undertook to regularly review tariff. The Government doesn’t keep to all that. Right now the Naira stands at N360 to the US Dollar and tariffs remained denominated at N198 to the Dollar. The DISCOS also promised to inject funds from offshore sources to the sector but ended up largely raising funds from local market. The high interest rates charged locally meant more pressure on the invested funds.

But the solution does not lie in arbitrary tariff increase. It does not lie is sacking the DISCOS (which is bound to attract legal tangos), it also does not lie in government divesting the remaining 40 percent equity in the assets.

The solution would come when government and the DISCOS ensure close to 100 per cent metering of Nigerians and when full biometrics of metre owners  are captured to ensure power theft offenders are traceable. The solution would come when old transformers and obsolete cables that lead to power losses at the downstream end are fixed. There would also be solution when the National Assembly rises to its billing by banning estimated billing by DISCOS and criminalising power/energy theft. Even at that, government must be ready to subsidise power at some levels and its 40 per cent holding in the assets can come in handy in doing that.

The post Why darkness may persist in your homes for now appeared first on Tribune.

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