• Monday, June 24, 2024
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BusinessDay

Manufacturers association’s court order threatens power supply in Kano, others – Kano DisCo

As operators trade blame, grid collapse worsens outages

A court order obtained by the Manufacturers Association of Nigeria (MAN) has thrown Kano and other cities in the country into uncertainty as it threatens power supply, according to the Kano Electricity Distribution Company (Kano DisCo).

This dispute, which has seen MAN take legal action, according to KEDCO, threatens to disrupt power supply across the key northern states of Kano, Katsina, and Jigawa.

In a release seen by BusinessDay, KEDCO highlighted that the tariff adjustment is a response to a government mandate to prioritise subsidies for ordinary citizens and lower consumption groups.

“The subsidy had become too burdensome, and the FG was reducing the allocation of subsidies in Kano, Katsina, and Jigawa from a peak of almost N19 billion per month to about N10 billion per month with a focus on lower supply and lower income groups. The pricing for gas has gone up significantly impacting the cost of electricity in Nigeria,” the company said.

However, MAN proceeded to court without prior consultations with KEDCO or the Nigerian Electricity Regulatory Commission (NERC), obtaining an injunction on May 2 to halt the new tariff implementation.

This legal move, according to KEDCO, threatens their financial viability, as the company purchases electricity at ₦140 per kilowatt hour (kWh) but is being pressured to sell at ₦77/kWh, a disparity they deem unsustainable.

Meanwhile, the DisCo said its Band A MD Customers on 41 feeders (many from MAN) have been enjoying 23 to 24 hours of mainly uninterrupted supply since April 1, 2024, per the NERC Order.

“Despite this and without warning MAN and its members took KEDCO to court to halt the implementation of the new Tariff. The presiding judge on the 2nd of May, 2024 issued an injunction compelling KEDCO to suspend the new tariff in Kano while not considering how much the DISCO buys electricity for 2 weeks ongoing and the court has not sat.

“MAN is essentially demanding that the allocation of subsidies that are being prioritized to ordinary citizens in our franchise area from the Federal Government be forcefully reallocated to them.

“This is even though prices for all items in Nigeria have gone up through incremental pricing by manufacturers and other service providers as can be seen from the persistent inflation in the country,” the statement read.

According to the DisCo, MAN, through its actions is actively disrupting the power supply in KEDCO’s franchise area and is seeking for KEDCO to be unable to operate as a business “(since we won’t be able to buy power to sell).”

“With MAN encouraging all its members not to pay the tariff, KEDCO is unable to buy electricity to supply and will begin ramping down supply in Kano, Katsina, and Jigawa immediately.”

KEDCO is licensed by NERC to distribute, and market electricity to customers within Kano, Katsina, and Jigawa states, covering the geographical area of 67,128 km2 in the northwestern part of Nigeria.

“KEDCO is encouraging the State Government and all well-meaning citizens to write, call and encourage MAN to come to the table and become a productive partner for supplying power to citizens in Kano, Katsina and Jigawa.

“KEDCO has ideas and solutions that will help MAN without disrupting KEDCO’s operations and the provision of energy to citizens. KEDCO is not able to sell a product for ₦77 while purchasing at ₦140,” the statement read.

In addition, the electricity DisCo said it does not believe MAN’s priorities should be higher than those of ordinary citizens.