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Power: Towards Actualising FG’s 6,000mw Target

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Recently, the Federal
Government stirred the hope of Nigerians when it announced a new target of 6,000 megawatts  of electricity generation in the country.
At the 15th Herbert Macaulay Memorial Lecture, organized by the Faculty of Engineering, University of Nigeria, Nsukka, Penultimate Saturday, the Minister of Power, Prof Chinedu Nebo, promised that the country would hit 6,000 megawatts in electricity generation before December this year.
The simplest interpretation of the minister’s pronouncement is that before the next six months, electricity generation which for the past four months has been struggling to stabilize at 3,500 megawats would catapult to 6,000 megawatts, which is a little less than 100 per cent increase. Quite a fear indeed, if actualized.
More than any administration, the present administration led by Dr Goodluck Jonathan has shown bold commitment in the development of the nation’s power sector through its reform agenda.
The administration inherited 2,250mw electricity generation during its inception under the then Power Holding Company of Nigeria (PHCN), and decayed infrastructure with power plants that hardly met half of their installed capacities.
But realizing that electricity remains the catalyst that could power the nation’s economy in its bid to actucalise its vision of becoming one of the first 20 economies of the world in 2020, it privatized the then PHCN by opening the market for interest foreign and local investors for efficiency.
Apart from privatizing PHCN, it embarked on massive repairs and upgrading of power plants across the country and had recently also disclosed its determination to embark on the longest gas pipeline project that would run from the South, through the West and to the Northern part of the country.
For a nation with the 9th biggest gas reserves in the world, abundant coal and hydropower potentials, growing interest in solar energy and huge power infrastructural development, achieving 6000mw target for her 170 million citizens should not attract any reasonable attention, after all.
Yet major challenges that may truncate the humble target of 6000 mw electricity generation set by the government are, the activities of callous vandals who vandalise with passion, oil and gas pipelines, including electricity transformers through which the electricity as the end point can get to the Nigerian masses.
Early this year, Federal Government successfully repaired the Escravos gas pipeline that was crippled by incessant vandalism and was able to raise generation to over 900mw, but while Nigerians were enjoying the improved power generation, the vandals attacked Trans-Forcados pipeline, leading to its being shut down thereby forcing the nation back to where it was.
The Managing Director of 4 Power Consortium recently lamented over the negative impact of transformer vandals to the Port Harcourt Electricity Distribution Company (PHEDC).
He said an average of four transformers were being vandalized daily in Akwa Ibom State alone and noted that in the company’s effort to improve power generation to the people, the activities of the vandals to power facilities have become a challenge difficult to surmount. Infact, the MD even threatened that PHED was considering a shut down in the state.
According to Edevbie, the vandals have strong penchant for transformer oil which they consider to be lucrative.
Another company manager had also revealed that the vandals target the copper wire which they sell at cheap prices to some dealers who melt them for the production of earnings, necklaces and other jewelries.
Yet another obstacle to Nebo’s 6000 mw, target by December this year will also come from the mistrust between the former PHCN workers inherited by the new private investors.
The management of Power firms across the nation are being accused of power welfare of their staff and also not ready to tolerate unionism .
They are also accused of targeting staff who are interested in union matters. Just two weeks ago, the Nigeria Labour Congress in the South South had to picket PHEDC.
Among their reasons were nonpayment of the  severance package to some of the former PHCN workers which was part of the privatization processes casualisation of staff, as well as the new investors’ unwillingness to tolerate labour unions in their firms.
As a result of the frosty relationship, NLC sealed off all the offices of PHEDC in the four states it covers and only suspended the picketing when it assumed a violent dimension.
The new investors on their own parts complained of being weighed down by huge debt by customers who benefitted from their services. The MD of 4 Power accused the government of being the worst debtors and disclosed that through most of the parastatals and agencies, the government’s huge debt was frustrating the company’s operations.
So, while Nebo means well in his new target, as the representatives of the government,  it also behoves him to initiate ways and means through which government agencies that have become irresponsible debtors to the power companies to do well by offsetting their debts. Maybe, the better way of doing this is by designing ways of withdrawing directly from their subventions and allocations.
It is only when the huge debts owed the new power firms are paid that the ambitious 6000mw target could be actualisable.
It baffles the common masses when issue of non payment of severance packages resurfaces in view of the several hundreds of billions of Naira Federal Government said had been released to the PHCN former staff. Not minding whether the claims are right or wrong, the government should ensure the privatization process of the reform should be seen as a past stage that has been fairly concluded by those directly involved.
The Public must come to the reality of the fact that the new investors are in business solely for profit unlike before when government was in charge and electricity supply was viewed as a social services. As the tone has changed, so also should the dancing step change in order to match.
The community leaders and chiefs who for one reason or the other were not paying for electricity services supplied to them before must know that nobody other than them would pick their bills for services they enjoyed through the private firms.
The new call for re-orientation should as well as be approached with patience on the part of the new investors. The public must know that the investors have only recently taken over and therefore not expect the best which should come with time. In the other way round, the new investors should also be patient in their bid for profit maximization since their publics and customers need to adjust their with time.
The investors should do themselves good by developing a framework that could engender good relationship with their workers by way of embracing unionism because, it is a reality they can not run away from as long as their operations are in line with the nation’s constitution.
On the part of the consumers, of both classes, the investors must consider attractive Corperate Social Responsibility (CSR) initiatives to engender and sustain cordial and harmonious relationship with them.
Such CSR initiatives would be of huge benefit to the power firms as they would need to collaborate with the public especially in protecting their facilities since frosty relationship may not be able to drive such collaboration.
With these steps, and better protection of pipelines  through involvement of the natives, 6000mw could be attained by December.

 

Chris Oluoh

 Minister of State for Power, Mr Mohammed Wakil (right) and Team Leader of American Investors, Mr Roy Tefeez, signing a Memorandum of Understanding (MoU) on power in Abuja, recently. With them is Director, Legal Services, Ministry of Power, Mrs Adedotun Shoetan. Photo: NAN

Minister of State for Power, Mr Mohammed Wakil (right) and Team Leader of American Investors, Mr Roy Tefeez, signing a Memorandum of Understanding (MoU) on power in Abuja, recently. With them is Director, Legal Services, Ministry of Power, Mrs Adedotun Shoetan. Photo: NAN

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NERC, OYSERC  Partner To Strengthen Regulation

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THE Nigerian Electricity Regulatory Commission (NERC) has stressed the need for strict adherence to due process in operationalizing state electricity regulatory bodies.
It, however, pledged institutional and technical support to the Oyo State Electricity Regulatory Commission (OYSERC).
The Chairman, NERC, Dr Musiliu Oseni, who made the position known while receiving the OYSERC delegation, emphasised that the establishment and take-off of state commissions must align fully with the law setting them up.
Oseni said that the NERC remains committed to partnering with State Electricity Regulatory Commissions (SERC) to guarantee their institutional stability, operational effectiveness and long-term success.
He insisted that regulatory coordination between federal and state institutions is critical in the evolving electricity market framework, noting that collaboration would help to build strong institutions capable of delivering sustainable outcomes for the sector.
Also speaking, the Acting Chairman, OYSERC and leader of the delegation, Prof. Dahud Kehinde Shangodoyin, said that the visit was aimed at formally introducing the commission’s acting leadership to the NERC and laying the groundwork for a productive working relationship.
Shangodoyin said , the acting members were appointed to provide direction and lay a solid foundation for the commission during its transitional period, pending the appointment of substantive members.
“We are here to formally introduce the acting leadership of OYSERC and to establish a working relationship with NERC as we commence our regulatory responsibilities,” he said.
He acknowledged NERC’s readiness to provide technical and regulatory support, particularly in the area of capacity development, describing the backing as essential for strengthening the commission’s operations at this formative stage.
“We appreciate NERC’s willingness to support us technically and regulatorily, especially in building our capacity during this transition,” he added.
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NLC Faults FG’s 3trn Dept Payment To GenCos

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The Nigeria Labour Congress and the Association of Power Generation Companies have engaged in a showdown over federal government legacy debt.
NLC president Joe Ajaero has faulted the federal government’s move to give GenCos N3 trillion from the Federation account as repayment for a power sector legacy debt, which amounts to N6.5 trillion.
In a statement on Thursday, Ajaero said the Federal Government proposed the N3 trillion payment and the N6 trillion debt as a heist and grand deception to shortchange the Nigerian people.
“Nigerians cannot and should not continue to pay for darkness,” Ajaero stated.
Meanwhile, the Chief Executive Officer of the Association of Power Generation Companies, APGC, Dr. Joy Ogaji, said Ajaero may be ignorant of the true state of things, insisting that the federal government is indebted to GenCos to the tune of N6.5 trillion.
She feared the longstanding conflict could result in the eventual collapse of the country’s power.
According to her, the federal government’s N501 billion issuance of power sector bonds is inadequate to address its accumulated debt.
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PENGASSAN Rejects Presidential EO On Oil, Gas Revenue Remittance  ……… Seeks PIA Review 

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The Natural Gas Senior Staff Association of Nigeria(PENGASSAN) Festus Osifo, has faulted the public explanation surrounding the Federal Government’s recent oil revenue Executive Order(EO).
President of the association, Festus Osifo, argued that claims about a 30 per cent deduction from petroleum sharing contract revenue are misleading.
Recall that President Bola Ahmed Tinubu, last Wednesday, February 18, signed the executive order directing that royalty oil, tax oil, profit oil, profit gas, and other revenues due to the Federation under production sharing, profit sharing, and risk service contracts be paid directly into the Federation Account.
The order also scrapped the 30 per cent Frontier Exploration Fund under the PIA and stopped the 30 per cent management fee on profit oil and profit gas retained by the Nigerian National Petroleum Company Limited.
In his reaction, Osifo, while addressing journalists, in Lagos, Thursday, said the figure being referenced does not represent gross revenue accruing to the Nigerian National Petroleum Company Limited.
He explained that revenues from production sharing contracts are subject to several deductions before arriving at what is classified as profit oil or profit gas.
Osifo also urged President Bola Tinubu to withdraw his recently signed Presidential Executive Order to Safeguard Federation Oil and Gas Revenues and Provide Regulatory Clarity, 2026.
He warned that the directive undermines the Petroleum Industry Act and could create uncertainty in the oil and gas industry, insisting that any amendment to the existing legal framework must pass through the National Assembly.
Osifo argued that an executive order cannot override a law enacted by the National Assembly, describing the move as setting a troubling precedent.
“Yes, that is what should be done from the beginning. You can review the laws of a land. There is no law that is perfect,” he said.
He added that the President should constitute a team to review the PIA, identify its strengths and weaknesses, and forward proposed amendments to lawmakers.
“When you get revenue from PSC, you have to make some deductibles. You deduct royalties. You deduct tax. You also deduct the cost of cost recovery. Once you have done that, you will now have what we call profit oil or profit gas. Then that is where you now deduct the 30 per cent,” he stated..
According to him, when the deductions are properly accounted for, the 30 per cent being referenced translates to about two per cent of total revenue from the production sharing contracts.
“In effect, that deduction is about two per cent of the revenue of the PLCs,” he added, maintaining that the explanation presented in the public domain did not accurately reflect the structure of the deductions.
Osifo warned that removing the affected portion of the revenue could have operational implications for NNPC Ltd, noting that the funds are used to meet salary obligations and other internal expenses.
“That two per cent is what NNPC uses to pay salaries and meet some of its obligations.The one you are also removing from the midstream and downstream, it is part of what they use in meeting their internal obligations. So as you are removing this, how are they going to pay salaries?” he queried.
Beyond the immediate impact on the company’s workforce, he cautioned that regulatory uncertainty could affect investor confidence in the sector.
“If the international community and investors lose confidence in Nigeria, it has a way of affecting investment. That should be the direction. You don’t put a cow before the horse,” he added.
According to him, stakeholders, including labour unions and industry operators, should be given the opportunity to make inputs at the National Assembly as part of the amendment process saying “That is how laws are refined,”
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