Energy - News - February 16, 2021

Nigerian govt. still subsidizing electricity supply with over N50bn monthly – Minister

The Federal Government says it is still subsidizing electricity supply in the country by over N50billion every month to guarantee adequate supply to consumers.
The Minister of Power, Sale Mamman, who disclosed this in Abuja said the government was seriously concerned over serious concerned over the failure by the electricity distribution companies (DSCOs) to take steps to stabilize their operations by meeting their financial obligations to other players in the Nigeria Electricity Supply Industry (NESI).
Mr Mamman said the huge subsidy was to augment the funding shortfall by the DISCOs who have failed to defray the cost of bulk electricity supplied to them by the electricity generating companies (GENCOs).
The subsidy, he explained, was to avoid periodic increase in the cost of electricity after the previous hike resulted in a protest by the workers led by the Nigeria Labour Congress (NLC).
Last September 1, 2020, the Nigeria Electricity Regulatory Commission (NERC) approved 100 percent hike in electricity tariffs in the country to help the DISCOs meet its obligations.
But the tariff adjustment appears grossly insufficient to take care of the huge shortfall between what the DISCOs are expected to pay to the GENCOs for bulk electricity supplied to them and the revenue collection from supplies to consumers.
The Minister said the monthly subsidy has only been sufficient to reduce by half the outstanding funding shortfall.
The Association of Nigerian Electricity Distributors (ANED) said last year the funding shortfall was as high as N1.7trillion.
Since 2014, the government it has spent N1.5trillion through the Central Bank of Nigeria (CBN)’s Power and Aviation Intervention Fund by the Nigerian Bulk Electricity Trading (NBET) to sustain liquidity and guarantee continued supply of electricity.
The Minister told members of the Hausa Guild of Actors & Film Producers, also known as Kannywood, who called on him that continued subsidy of electricity was part of measures to assist ordinary Nigerians.
“The Federal Government was forced to categorize electricity supply into various bands between highbrow areas and low-income earners to enable everyone cope with the cost of electricity.
“Nigerians must understand that these companies were privatized long before the advent of this administration. But the government has no alternative than to continue managing the sector before a final solution is secured,” the minister said.
Through the Presidential Power Initiative and other intervention measures, he said the government was working to massively resolve all the inherited problems that have continuously frustrated the success of the sector.
Most of the DISCOs, the minister said were sold off and managed as family businesses, making it difficult to manage professionally.
Despite the obvious difficulties, he said the government cannot roll back the privatization process and take over the privatized power assets.
In spite all these problems persist, he said the government has recorded remarkable performance and progress in the sector, as the supply of electricity has stabilized at over 5,000 megawatts (MW), from less than 4,000 MW before the coming to power of the present administration.
He said Nigerians now enjoy stable power supply for between 15 to 24 hours daily.
The Minister blamed the shortfall in funding which has resulted in interruptions on electricity supply to some quarters on faulty equipment and supply lines, urging consumers to report such developments to their distribution offices.
He also pointed out that it was the responsibility of the DISCOs to replace faulty transformers, electricity poles and cables whenever they occur and warned the DISCOs to stop tasking ordinary Nigerians with these responsibilities before they could restore power interruptions.
He commended consumers for paying their electricity bills despite the present economic and social problems.
The minister advised them to minimize their usage of electricity by switching off their appliances when not at home or when they were not immediately needed, in order to reduce pressure on equipment supplying them power.
On metering, Mr Mamman said although it was the responsibility of the DISCOs to provide the meters, the government has stepped-in to support in view of the public outcry over estimated billings.
He said the government was committed to supplying over Six million meters free of charge to Nigerians, with about one million meters already delivered for distribution.
The Minister called on the DISCOs to expedite action on the distribution of meters free of charge to their consumers as a way of lessening their problems.
Earlier, the Head of the Kannywood producers and Actors, Mandawari Ibrahim said they had decided to avail their services to the Ministry of Power to adequately enlighten Nigerians on the achievements of the Buhari administration under the Power sector.

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