Chukwueloka Umeh, chief executive officer of Century Power Generation Limited, says electricity tariff increment is necessary for the power value chain to work effectively and efficiently and ensure that power is available for every Nigerians.
Umeh stated that the Nigerian Electricity Regulatory Commission’s (NERC’S) failure to increase electricity tariff steadily in bits since 2015 as stipulated in the Multi-year Tariff Order (MYTO), has made the almost 100percent rise in tariff discomforting for Nigerians, especially amid the virus outbreak.
He, however, admits that the timing for this increase could be better, considering the economic situation in the country.
Speaking as a guest on a television program in Lagos recently, he reasserted that the government role in the power sector needs to be solely that of an enabler that provides a conducive investment climate for investors and a regulator that oversees the operation of the industry.
Umeh, who is also the Chief Operating Officer (COO) of the Nestoil Group, said that an increase in the tariff to a cost-reflective level is necessitated by the need for the Discos to upgrade and maintain their infrastructure, provide the service that people expect, and also be profitable.
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He added that Discos also need to generate enough revenue for the other companies in the value chain, including TCN, the Gencos, and the gas suppliers and transporters to get paid.
“If these investments and payments are not made, people would get the power they’re required to pay for,” he said.
For electricity to be available, he urged the government to create policies that encourage investment, ensure that contracts are respected and backed by the rule of law.
He emphasized that the private sector should be allowed to drive the entire power value chain and that competition should be encouraged to drive the right tariff pricing.
“Finally, the government should desist from trying to regulate a market into existence, but rather, relax regulations enough to allow the sector to grow organically,” he added.
He noted that the public and even some pertinent persons in government are not sufficiently informed about the power sector. Hence, the lack of understanding that without a functioning value chain involving gas producers and transporters, Gencos, TCN, and Discos, most Nigerians will regrettably continue to pay for darkness.
