Oil & Energy
Stable Electricity Supply: NERC To Carry Out Tariff Review At Six-Month Interval
The Nigerian Electricity Regulatory Commission (NERC) says it will conduct a minor tariff review every six months to reflect the economic situation in the country.
This, it stated, is due to the disparity between the local currency (naira) and other major international currencies, especially the United States dollar.
NERC Chairman, Sanusi Garba, explained that the minor tariff review approved for the Distribution Companies (DisCos) was in line with the tariff methodology adopted by NERC for periodic adjustments of tariffs based on inflation, exchange rates and gas pricing.
“We will adjust the rate every six months to take care of the foreign exchange component of costs, and also inflation.This is absolutely a very straight-forward thing,” Garba said.
Debunking the insinuation that the Commission was implementing tariff review in secrecy, Garba added a caveat that while the review “might not necessarily be an upward review,” the country’s foreign exchange rate has maintained an upward path as the naira is being devalued. Inflation, he said, has also remained on the high side.
The implication of this, experts explained, is that should these economic indexes continue to rise, the electricity tariff review would have to follow a similar trend and vice-versa.
Garba noted that the prevailing situation, especially pipelines vandalism, has been affecting gas supply to power plants, adding that the development remained a major reason for the worsening state of electricity in the country.
He said discussions are on to bring new gas plants on the grid to address the shortfall currently being witnessed in the grid.
The commission blamed the loss of about 400 megawatts and challenges on some networks for the double collapse of the grid recently.
According to Garba, stakeholders, including the Nigerian National Petroleum Company Limited, are working hard to resolve prevailing challenges.
The NERC boss said DisCos are being forced to pay back to consumers where they have been billed illegally, adding that the company will do everything possible to protect the interest of consumers.
NERC, he explained, ensured that Jos DisCo refunded N200 million to consumers for poor service, adding that capping of estimated bills is also to protect consumers against arbitrary charges.
Admitting that the generation firms are being owed legacy debts, he noted that the government is clearing other debts.
Garba said the issue of shortage of gas supply to power plants, collapse of the national grid, illiquidity of the industry, huge metering gap and infrastructure deficit were some of the challenges confronting the sector.
He said the plan of the government was to ensure that the thermal power plants were working optimally and to ensure that there was stability in the grid.
NERC, he continued, had approved a special gas pricing for emergency contracting of gas from the Nigerian Gas Marketing Company Limited for the Niger Delta Power Holding Company (NPDHC), to optimise utilisation of its power plants.
According to him, it is expected that about 800MW will be generated from the NDPHC plants.
He said the gas pipeline affected by acts of vandalism had been restored and the Okpai Power Plant had resumed power generation and contributing an average of 300MW. He added that the “pegging” of the gas pipeline supplying gas to the Odukpani Power Plant had been scheduled for completion thus ramping up generation by about 400MW.
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Delta Targets 120MW Power Boost, Moves To Cut Reliance On National Grid
The State Commissioner for Works (Rural Roads) and Public Information, Charles Aniagwu, disclosed this at a press conference in Asaba, weekend, noting that the initiative was part of wider reforms aimed at opening up the power sector to private investors.
Aniagwu, who was accompanied by the Executive Assistant to the Governor on New Media, Felix Ofou, said the state was exploring alternative sources of electricity to support businesses, households and communities while reducing pressure on the national grid.
He said the government was particularly interested in exploiting Delta’s abundant natural gas resources for power generation, pointing to the Kwale Free Trade Zone, which is part of the state’s special economic zone, as a major opportunity for investors.
According to him, prospective investors were taken to the zone during the state’s recent economic summit to enable them to assess the availability of gas as a key raw material for electricity generation. ComparePower Rates
The commissioner explained that generating more electricity locally would not only increase supply in Delta but also free up power on the national grid for use by other consumers.
Aniagwu cited the 8.5MW Independent Power Plant located behind the state secretariat in Asaba as an example of what could be achieved through alternative power sources.
He said the facility had enabled the secretariat complex to operate independently of the national grid, thereby making the electricity that would otherwise have been consumed there available to other users.
He added that the planned 120MW partnership with Supply Power would further strengthen the state’s electricity supply capacity and provide a more reliable power base for small and medium-sized enterprises.
Aniagwu said the state government was also intervening in areas traditionally regarded as the responsibility of electricity distribution companies because inadequate power supply could no longer be allowed to constrain economic development. LearnQuantum Physics
He identified the extension of the electricity grid from Abraka towards the Ndokwa axis as one of the interventions being undertaken to connect more communities to electricity.
The commissioner, however, raised concerns over the burden placed on communities that are often required to provide transformers and other electricity infrastructure, only for distribution companies to take over the facilities and subsequently collect electricity bills without adequately accounting for the investments made by the communities.
He said the state would continue to support efforts aimed at energising communities, noting that improved electricity supply would stimulate businesses, create jobs and help tackle social problems associated with unemployment and idleness.
On regulation, Aniagwu said the government was working with the Ministry of Energy and a committee set up to develop an appropriate regulatory framework for the state’s emerging power sector. SwitchEnergy Plans
He said the proposed energy commission would be responsible for regulating new electricity producers, determining appropriate tariffs and overseeing distribution networks.
The commissioner stressed that liberalising the sector required effective regulation to protect consumers and investors, adding that decisions on power distribution infrastructure, including the use of overhead or underground lines, must take into account the peculiarities and safety requirements of each location.
He warned that power expansion without adequate regulation could expose residents to electrocution and other hazards, stressing the need to protect electricity infrastructure while ensuring consumers were not subjected to unfair pricing.
Aniagwu said the state government’s broader objective was to build an efficient and sustainable electricity market driven by private investment and capable of powering businesses, households and communities across Delta State.
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