Chief Adebayo Adelabu, Minister of Power, announced yesterday that the Federal Government has paid N205 billion to electricity generation firms (GenCos) as part of measures to decrease the N1.3 trillion debt owing to them.
Chief Adebayo, speaking during a visit to the Ministry by the House of Representatives Committee on Power, noted that most energy consumers in the country pay less than the cost price of N120/kWh.
The Minister added that “approximately three weeks ago, we were able to pay the GenCos N205 billion of the N1.3 trillion we owed them. They are also joyful.
“But I will plead with the members of the House committee to help us mount pressure on the executives to continue to pay these people.
With fuel queues resurfacing on our roads, darkness should not join it. People that make too much noise about fuel queues are those that buy petrol or diesel for their generators. Maybe if we have stable electricity they will be able to stay in their house and enjoy parts of life”.
He harped on the importance of having a cost reflective tariff for the electricity market, pointing out that that was the only way to attract investments.
“I’m telling you that as a businessman, if the economics of any sector is not good, if the commercial is not good, there’s no way the sector can operate. Because every participant in a particular sector, in the value chain in all the segments, must be duly compensated. That is the only incentive, the only inspiration, that will make them continue in business. If the price is not good, business will collapse.
“So we said, we have suffered a lot of epileptic supply, just because our tariff policy was not appropriate for this environment. It is good to subsidize your people to be able to enjoy certain things by paying less. But if the subsidy is not supported with adequate funding, that does not mean anything. And we have seen debt, piling up, owing to the generating companies, the transmission company, and even the distribution companies.
“This does not encourage them to produce or generate up to what we need as a nation. Which is why we introduced the partial cost-reflective tariff to the part of the consumers that we believe can enjoy 20 hours plus of power supply”.
Adelabu explained that but for the expected opposition from consumers, the government would have pushed the electricity tariff for Band-B customers to about N160/kWh which would have guaranteed a minimum supply of 16 hours daily.
Meanwhile, the Managing Director of the Transmission Company of Nigeria, TCN, Engr Abdulaziz Abubakar has told the House Committee on Power that state governments were demanding over N600 billion from the company for ground rents for its substations dating back to the 1970s.
Engr. Abubakar said the company does not have that kind of money and is unable to meet the demands of the governors.
“We have a lot of letters from almost all the 36 governors demanding for ground rent of our substations. And these ground rents have been backdated since the 1970s. At that time there was no TCN.
There was ECN or Niger Dams. We have never paid ground rent before as TCN. But they will calculate everything and send it to TCN.
“What we have now is over 600 billion Naira which TCN cannot pay. So we want legislation or a waiver so that any place where we are building a substation, that land should be given to TCN without asking for ground rates because we cannot afford it”, he added.
He also asked for the intervention of the legislators over import duties and value added tax imposed on equipment brought into the country to improve transmission infrastructure in the sector.
Earlier, the Chairman, House Committee on Power, Rep. Victor Nwokolo harped on the need to improve power supply in the country.
He expressed the readiness of the House to support the sector with the necessary legislative backing to achieve the objectives of the government, but warned that the House would not fold its arms and allow consumers to be shortchanged.
