DISCOS: FG Lied On Power Generation Capacity… Say withdrawal of license will not stop imminent collapse of sector

The 11 electricity distribution companies (Discos) in Nigeria’s electricity market Tuesday accused the federal government of lying on its claims of improvement in power generation in the country, stressing that generation capacity as at January 2015 was 6,421 megawatts (MW) and not 4,000MW as often claimed by the government.

The operators also took a swipe at the federal government for asking them to either upgrade their efficiency levels in the market or quit the stage, saying that such orders would not stop the imminent collapse of the electricity sector.

Speaking through the Executive Director, Research and Advocacy of their umbrella association, Association of Nigerian Electricity Distributors (ANED), Mr. Sunday Oduntan, the Discos explained that the government has largely created more confusion in the operations of the country’s electricity sector, than it had helped it.

Reacting to the government’s claims that power generation had peaked to 7,000MW since President Muhammadu Buhari came into office in May 2015, Oduntan explained that as at January 2015, Nigeria already had close to that generation figure.

He also described as false, the government’s repeated claim that an excess generation of 2,000MW was idle.

He said: “A review of NERC’s “Daily Energy Watch” for January 28, 2015, would indicate a generation availability of 6,421MW – divided into the peak of 4,230MW and constrained energy of 2,191MW. In other words, it is misleading to state that available generation has grown from 4,000MW in 2015, as a measure of progress, given that a volume of generation slightly under 7,000MW already or previously existed, prior to the beginning of this administration.

“Furthermore, there is no stranded 2,000MW. While there is an available capacity of 7,000MW, the best that can be generated, at this time, is 5,000MW. This is because there is insufficient gas to power the thermal plants due to gas line limitations – for instance, the non-completion of the Oben pipeline, and the absence of a commercial framework that would encourage gas exploration.”

According to him, generation that is constrained by gas amounts to an average 1,500MW daily, adding that 25 out of 28 generation plants are fuelled by gas.

He explained that transmission grid frequency, line limitation, and water management made up the difference of the balance 500MW of constrained generation.

He added: “In simple terms, the often-advertised and pronounced Disco limitation to take on 2,000MW of additional generation is not consistent with the facts or reality. This, therefore, shows that very little has actually changed contrary to the minister’s constant pronouncements.

“It is with much regret that we feel compelled to respond to the significantly distorted picture that has been painted of the Discos by the Minister of Power, Works and Housing (Mr. Babatunde Fashola), in his press briefing on Monday, July 9, 2018.”

He said the challenges of the Nigerian Electricity Industry (NESI) could not be turned around based on a culture of misrepresentation, adding that the Discos had declined to rebut previous inaccurate assertions by the minister and other government functionaries in good faith.

He said the ministers’ recent pronouncement was a clear attempt to demonise the Discos, who by the structure of NESI, are the faces of a difficult sector.

Oduntan, in an interaction with journalists in Abuja Tuesday, also faulted the government’s order to the Nigerian Electricity Regulatory Commission (NERC) through Fashola, to get them to buckle down or shape up, adding that no amount of government’s order would correct the failings of the sector, which they added would lead to its collapse.

He further said: “We are also left wondering whether such demonisation of the Discos is camouflage for the absence of the effective policy leadership that is desired for implementing the enabling environment that is necessary for the viability and sustainability of NESI?

“We recognise that we are on the crux of a political season, in which all manner of advantage is being sought by political contenders, we, however, do not want to be used as the whipping dog to advance other people’s agenda.”

He stated: “Our members, the Discos, are not politicians, even though they distribute a product that is of great importance to politicians, in view of the needs of their constituents. Our constituency which consists of customers, employees, bankers, vendors and investors have a greater interest in improved service delivery than the adoption of cheap theatrics and propaganda for political advantage.”

He noted the Discos were committed to their obligations, as well as meeting the performance obligations of the agreement that they have with the Bureau for Public Enterprises (BPE).

He also stated that the Ministry of Power had taken away the independence of the NERC by constantly imposing on it orders to execute in the sector.