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State governments can establish their own power stations – Fashola


Babatunde Fashola, the minster of Power,Works and Housing has said that contrary to wide held beliefs, there is nothing in the power sector regulations or law that prohibits state governments from generating, transmitting and distributing their own electricity.

“Clearly therefore, contrary to widely held beliefs, state governments can establish their own power stations, can generate, transmit and distribute electricity in areas not covered by the National grid within that state and establish their own electricity to promote and manage their own power stations” Fashola said in a keynote address delivered at the Punuka Annual Lecture Series on May 9, in Abuja.

The minister therefore called on other tiers of government such as state and local governments to pay attention to communities within their territories with limited access to grid power to improve energy access for them off-grid solutions.

“They are clearly not areas covered by the Grid and therefore constitute a viable area of intervention by a state government to contract their own power supply without reference to the federal government,” said Fashola.

The former Lagos state governor took a swipe at calls for review of the 2013 privatisation exercise, saying those calling for review had to be more specific on what they want as the sector is essentially in private hands.

“The reality before privatization is that the Ministry of Power had over 50,000 staff, owned trucks, employed electricians who went out to repair faults, the Ministry controlled power stations like Jebba, Kainji, Shiroro, Egbin to mention a few and the Ministry employed all of those who worked in Distribution.

“All that is gone, since November 2013. From over 50,000 staff, the Ministry now has a staff strength of 729 people. There are no electricians, fitters, repair vehicles or distribution staff in our ministry anymore and we do not supply, repair or replace distribution transformers or meters. All of these are now the work of the DisCos, under contract with BPE and under license by NERC as a matter of Law,” Fashola said.

According to the Electric Power Sector Reform Act of 2005 (EPSRA), the minister is not empowered to issue directives to DisCos directly. He can issue directives to NERC to exercise their regulatory power over DisCos or GenCos and this includes for non-performance or to license a competing company to provide an alternative to non-performance and BPE who has a performance contract with DisCos to enforce the terms and condition of the contract, Fashola said

“It is such directives from the minister that has led to regulations being made by NERC to license Meter Asset Providers to bridge the metering gap that DisCos cannot cover and Eligible customers to allow consumers who utilize up to 2 MW and are not satisfied with what the DisCos give them, to buy their power directly from the GenCos

The minister said Nigerians can help by not only protecting electrical installations, paying our bills, helping to stop energy theft and interacting more with our Discos who are the interface with consumers, they must also consciously conserve energy and reduce waste.

“In addition, those who are self-generating through diesel or petrol generators must understand that their cost of self-generation at over N100 kw/h is much higher than public power.

“Since nothing stops them from using generators, there is nothing that should stop them from converting their generators to cleaner and cheaper energy sources like solar panels on their roof tops.

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