Nigeria’s electricity sector is facing a major crisis as operators failing to fulfil their contractual obligations trade blame while consumers grapple with poor supply.
On Monday, electricity distribution companies notified customers of a new system collapse.
“We regret to inform you of a total system collapse on the national grid at 10.40am today (Monday), leading to outages across our network,” said Eko Electricity Distribution Company.
Power supply has hovered below 4,000 megawatts in the past few weeks, a situation compounded by scarcity of petrol across major cities and soaring cost of diesel that has left businesses reeling.
Last week, the Transmission Company of Nigeria (TCN) blamed the current load shedding being experienced nationwide as a result of “very low power generation by the Generation Companies (GenCos)…”
In a statement signed by Ndidi Mbah, general manager, public affairs at TCN, said, “Presently, the cumulative generation nationwide is low and generation companies have attributed this to several factors including poor gas supply, fault in generating units of generating companies, scheduled and unscheduled maintenance, all of which have caused most power generating companies to limit their generation, and sometimes not generate at all.”
On Sunday evening, the Association of Power Generation Companies (APGC), an association of electricity generation companies, issued their own release, refusing to accept responsibility.
“Illiquidity, caused by the huge sums owed GenCos by the Nigerian Bulk Electricity Trading Plc (NBET), has more than ever before continued to frustrate the GenCos and kept them incapable of meeting their obligations which are extremely necessary to keep their power plants running and make capacities available” said Joy Ogaji, executive secretary of APGC.
The GenCos said cash crunch had disrupted such obligations including operations and maintenance as and when due, procurement of critical capital, spare parts and accessories, payment, and servicing of existing loans from lenders and financiers, and employee obligations.
The GenCos added that issues including inability to source foreign exchange, issues of gas volume, gas quality, gas pressure and gas transportation had consistently curtailed capacity utilisation by GenCos, thereby affecting generation.
“While the owners of the GenCos invested committedly and increased generation capacity up to 13,000MW across the country, no corresponding investment and improvement was made at the transmission and distribution ends. The result was the significant stranded capacity of GenCos, which ironically, Nigerians are in dire need of but cannot get,” Ogaji said.
Against the backdrop of the blame game, the Nigerian consumers who saw their electricity tariff rise over 35 percent in 2020 upon the introduction of the service-based tariff plan, are complaining of being short-changed.
“Paying bills under the service-based tariff is contractual, and there should be consequences for the breach of such contracts,” said Adetayo Adegbemle.
“Does the FG, regulators (NERC) or Discos have any mechanism to compensate consumers who are paying based on power supply bands they never received?” he asked.
The Nigerian Electricity Regulatory Commission (NERC) says it remains committed to protecting electricity consumers from failure to deliver on committed service levels under the service-based tariff regime.
BusinessDay contacted NERC but it had yet to provide a response as of the time of filing this report.
“You stock up on food to avoid severe inflation only for epileptic power supply and total grid collapse to make a total mockery of your efforts … and you can’t even find fuel to buy to power your private generator,” Babajide Ewuoso said in a tweet.