Chairman of the Nigerian Electricity Regulatory Commission (NERC), Sanusi Garba, on Wednesday faulted the Generation Companies (GenCos) claim of N1.6 trillion capacity debt being owed by the federal government saying most of them do not have a formal contract agreement to warrant capacity payment by the Nigerian Bulk Electricity Trading (NBET).
Briefing the press in Abuja, he said: “A number of generation companies today do not have effective contracts that guarantees the payment of the so-called unutilized capacity. It will be reckless to sign agreements for the generation plants for capacity that has not been delivered. And because the infrastructure is not there, it means that Nigeria will be paying for the capacity that has not been useful to Nigerians.”
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On Sunday, the Association of Power Generation Companies (APGC) said it was expecting N1.6tr capacity payment but Garba said: “If a generation company has an effective Power Purchase Agreement (PPA) that provides for a payment of a certain level of capacity. Then there is an obligation to pay.”
Garba also confirmed a new tariff in February saying, “What happened in February was just a minor review,” adding that it may not always be a hike as the tariff for consumers under one of the DisCos was reduced in the new template.
He said the DisCos have the obligation to inform consumers of the tariff change but if they don’t, consumers should report to NERC.
He also corroborated the Minister of Finance, Budget and National Planning, Zainab Ahmed’s stance that electricity subsidy has been ‘quietly’ removed. Garba said: “That policy decision was announced by the Minister of Finance, the subsidy at a point was as high as N600 billion a year. And gradually coming down to N30 billion this year. So that policy decision is from the government and we take direction from the government.”
On the cause of the recent system collapse, the Vice Chairman of NERC, Musiliu Oseni said having a spinning reserve may not be an immediate solution to some grid disturbances.
He said, “Like the first system collapse happened due to a conductor snap on the 330 kilovolts Benin transmission line axis. It cascaded into the loss of 414MW of electricity from the Ughelli plant.”