Tasks Before New Power Ministers

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From their formal meeting with officials in charge of various government’s agencies in the power sector, Chineme Okafor, writes that the duo of Saleh Mamman and Goddy Jedy-Agba, who were appointed last week as ministers of power by President Muhammadu Buhari, have their jobs cut out for them

In the front burner of the challenges of Nigeria’s power sector is the poor and unstable electricity supply in the country.

According to recent records on the operations of the sector from the Advisory Power Team in the office of the Vice President, Prof. Yemi Osinbajo, every day, the volume of electricity supplied to Nigerians has steadily fluctuated between 3500 megawatts (MW) and 4000MW.

Osinbajo’s office explained that this is mostly caused by insufficient gas supply to some thermal power generation companies (Gencos), especially to those Gencos owned and operated by the Niger Delta Power Holding Company of Nigeria (NDPHC) under the National Integrated Power Projects (NIPPs).

Besides the gas supply shortfalls, inadequate transmission and distribution systems have equally ensured that less power is supplied to Nigerian homes and offices every day. In fact, the Chairman of the Nigerian Electricity Regulatory Commission (NERC), Prof. James Momoh, disclosed at the formal meeting with Mamman and Jedy-Agba, that the volume of available and constrained electricity in the country were now equal, that is, what is generated and supplied were now equal to what were not generated or constrained.

First Task
Like it was in his first term when he appointed a lawyer with sparse knowledge of the electricity market and systems to head the power ministry, Buhari, again appointed people with scanty knowledge of the industry to run it.

Without prejudice, Mamman and Jedy-Agba’s scanty knowledge about the operations of the country’s privatised power sector were clear at their formal meeting. From their interactions, both ministers conceivably had no handy knowledge about how the sector operates and would as their first tasks have to study and catch up with developments in it.

As often stated, solutions to challenges are best proffered from points of knowledge, hence, for Mamman and Jedy-Agba to advance the fortunes of Nigeria’s power sector within the limited period they have to serve, they would need to gain the right knowledge.

And on that, the electricity distribution companies (Discos) in the country through their umbrella trade association – the Association of Nigerian Electricity Distributors (ANED), have offered to work with them to resolve the challenges of the sector.

Immediate Tasks
According to industry sources, the immediate task before Mamman and Jedy-Agba, would be to support the NERC to inaugurate and efficiently manage the cost reflective tariff regime in the power sector using its Multi Year Tariff Order (MYTO) structure.

Recently from a document it released, NERC explained that it analysed and found that the 11 Discos in Nigeria were owed a total of N1.153.47 trillion by the country’s electricity consumers over the last four years that it failed to review and allow them to operate with cost reflective tariffs.

These shortfalls which were all in the books of the Discos came about because the regulatory commission had reportedly on the orders of the federal government failed to conduct statutory periodic tariff reviews for the Discos.

According to the laws of the NERC as contained in the MYTO, the reviews are usually done in two phases of minor and major reviews wherein extant economic factors such as inflation and exchange rates, price of gas which are relevant to power production and supply are reviewed and considered.

Its failure to do this over a four-year period meant that the Discos supplied electricity to Nigerians on terms that were not economically viable. Hence, Mamman and Jedy-Agba, would need to resist potential urges to interfere on the independence and objectivity of the NERC as a regulator in the electricity market.

They, according to experts must focus on ensuring that the power ministry does not intervene in the regulation of the sector but commits to its policy enactment responsibility in line with the thoughts of the power sector reform articulated by the federal government.

Stepping up power supply by supporting the Transmission Company of Nigeria (TCN) and Discos to take more power produced by the Gencos to homes and offices in the country should from interactions with stakeholders be another immediate focus of the ministers.

The TCN have despite reported investments on the national grid, being unable to take more power from the Gencos, while the 11 Discos have also reportedly failed to upgrade their networks to distribute as much as the Gencos can produce.

As a practice now, the TCN and Discos are frequently at loggerheads over poor transmission and distribution facilities. Both have constantly accused each other of failing to live by their obligations or even showing utter disregard for extant market rules. Mamman and Jedy-Agba, must maintain an uncompromising stance in the interactions between the TCN and Discos with the sole aim of identifying and resolving their challenges.

Both ministers must at all times insist on fair play in the interactions between parties in the sector, and should as administrators of the industry be firm in supporting the NERC to implement disciplinary measures against erring parties in the market, that way, they would buoy a stable and progressive market able to attract investors confidence.

Recent records from Osinbajo’s office indicated that in the first six months of 2019, an average of 3,948MW per day was supplied to homes and offices while an average of 3,221MW every day was not supplied.

It also stated that the total amount of money lost or constrained for the period was N279,806 billion. Financially, the sector is doing poorly, a lot of buck-passing – especially between the TCN owned by the government and Discos, have continued to define the outlook of the industry. Mamman and Jedy-Agba, would have to ensure that these are improved on quickly.

Even in 2019, the national grid which the TCN manages still recorded collapses which the Discos said had occurred nine times so far as a result of poor protection of transmission infrastructure by the TCN. Revenue collection in the system have also remained largely poor, while technical and commercial losses amongst the Discos are still quite high. These would also need the immediate attention of the ministers, just as accidents in the sector deserves to be nipped.

According to a January report from the Nigerian Electricity Management Services Agency (NEMSA), about 146 electricity accidents were recorded in the sector in 2017, from which 113 deaths and 77 injuries were logged. This showed that the power industry is not entirely safe to work in, and as such urgent measures would need to be implemented through the NEMSA to cut down the high accident rates.

Mamman and Jedy-Agba, will in this regard need to support the NEMSA to undertake its technical regulation of the industry to ensure safety.

Another point in the sector deserving of immediate attention from Mamman and Jedy-Agba, would be the NIPPs which were set up in 2004 as an integral part of efforts to bridge the country’s power shortages.

The NIPPs have had their share of the sector’s challenges along with its transmission, distribution and gas supply infrastructure. Its 10 brand new plants which have a combined capacity to generate 5,455MW have had to deal with various challenges of poor gas supply and debt owed it for power supplied.

Although not directly under their purviews, the NIPPs would however make use of the backings of Mamman and Jedy-Agba in improving their lots, especially on issues of abuse of its rights of way (RoW) by communities and which often delay its transmission and distribution projects. Both ministers would also do the NIPPs a lot of good by supporting them to get the Discos to take over and operate the various distribution facilities it had built across the country to support and improve distribution of electricity, but which the Discos have often refused to take over.

Pledge to Work
Noting that he understood the centrality of the power sector to Nigeria’s desire to develop and create a stable environment for its people, Mamman, explained that he was ready to work for the industry.

He gave assurance of his commitment to provide a conducive working environment in the sector, stating: “I can assure you of my diligence and sense of commitment. I intend to apply myself totally to this assignment in order to justify the confidence entrusted on me by Mr. President and by extension, all Nigerians.”

According to him, he would remain accessible and open to honest interactions on how best to improve the lots of the sector.

“I also intend to operate an open-door policy to avail every staff, no matter their status, the opportunity to contribute their quota to the new course of action.
“I will welcome every information or advice that would enhance our efficiency,” he added, suggesting that he would be amenable to learning and fast too.