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NERC scores electricity firms low on performance

. to sanction TCN over delay report

By Simon Echewofun Sunday

The Nigerian Electricity Regulatory Commission (NERC) has scored the 11 Distribution companies (Discos) and other generation companies (Gencos) mostly for their poor performance and poor data submission.

Speaking yesterday at NERC Headquarters in Abuja, the Head, Engineering Standards & Safety department (ES&S), Engr. Abdullahi Mohammed said, the Discos’ underperformed as their average 55% Aggregate Technical Commercial & Collection Losses (ATC&C) was unacceptable as only 17% was projected in the MYTO. Their customers’ metering level fluctuated from 46% to about 44% in the year, NERC said it suspected wrong data submission from them.

Other faults identified for the Discos include low compliance for report submission, poor data credibility, variations in the number of customers and the meter installation statistics

The Generation companies (Gencos) had their electricity output go down from 70% earlier in 2015 to less than 65% with more stranded (unused) power.

The NERC also scolded the Transmission Company of Nigeria (TCN) for not submitting six months report of its performance between January and June of 2015.

“I am disturbed about TCN because it is the hub. If it does not behave well, other parts suffer. They refused to submit the six months report against the provision of the Act.

“We will write them query on that lack of compliance. They submitted two days ago but we are not accepting that,” he said.

Mohammed said there were suspected cases of incredibility from the operators’ data submission and reminded them that the Electric Power Sector Reform Act (EPSRA) 2005 says false information to the Commission attracts various sanctions including imprisonment.

“By the next performance review, we will get the actual culprits that are not performing accordingly,” he noted.

Data presented by the Commission indicates that the TCN, a public utility under the expatriate management of Manitoba Hydro International Nigeria Limited (MHINL) did not submit its six monthly report.

Although it reduced its transmission losses to 6% in the second half of 2015, there was a surge in the losses to about 9% between August and September. This was higher than the 8.05% the Multi Year Tariff Order (MYTO) assumed, indicating higher constraint in power supply and revenue loss.

More so, it frowned at the high electrocution rate of 120 deaths and 117 critical injuries saying there were up to 13 deaths in just a single community and that cannot attract further investment in the Nigeria Electricity Supply Industry (NESI).

Generally, Mohammed said: “The performance in the sector needs to be improved. It is really not impressing and we are making sure that our licences live up to their responsibilities.”

The Commission urged the operators to validate their data before submitting it to the Commission while tasking them on submitting the report of the previous month every 15th of the fresh month or face the outlined sanctions.

Mixed reactions over hike of interest rate by CBN

By Chris Agabi

There are mixed reactions over the decision by the Monetary Policy Committee of the Central Bank of Nigeria (CBN) to increase the benchmark interest rate by 1 percent at their last meeting.

While some economists and financial analysts flayed the outcomes of the increment of the rate, other said it is necessary in view of the present condition of the economy.

At the 248 MPC meeting held Tuesday in Abuja the MPC also raised the cash reserve requirement (CRR) from 20 to 22.5 percent.

Mr. Odilim Enwegbara, an Abuja based economist and analyst said he is completely disappointed with the outcome of CBN MPC meeting.

According to him, if the CBN says its decision is based on increasing

inflation rate, the CBN “should be informed, if they don’t know that

some countries have their inflation rates higher than their key

interest rates (central bank rates), especially when the central

bank’s MPR is focused on improving the economy.”

“The most plausible way to bypass this anti-SMEs, anti-real investment monetary policy of the CBN is by the federal government creating a specialised development bank to function as the provider of cheap loans (single digit loans) to Nigeria’s critical and strategic sectors such as industrial, manufacturing and agricultural/food processing sectors” Mr Enwegbara noted.

Also commenting, Mr. Manz Denga, a former Managing Director of

Transnational Corporation (Transcorp) and former regional managing

director of UBA, East Africa, said an increase in interest rate by CBN

means less lending opportunity as the cost of borrowing goes up.

He said “if the bailout funds and CBN Agric lending were at 9 percept

interest, I would rather want the CBN reduces the policy rate to match the 9 percent. This would stimulate lending and economic activities, for the new Government. The CRR and Liquidity Ratio should similarly be brought down, by proportionate numbers.”

Meanwhile, the Coalition of Civil Society Groups (CCSG) has called on Nigerians to support the current monetary policy implemented by the Central Bank of Nigeria (CBN).

The group said that a change that will usher in an everlasting period of prosperity must be gradual and not spontaneous.

The president of the group, Mr. Etuk Bassey Williams said this during a press conference in Abuja.

Bassey noted that Nigeria is presently going through one of the most difficult periods in her national life owing to several events such as global oil glut that have characterized the socio-economic and political landscape of the nation in the past one year.

He stated that the group are very optimistic that the various

policies of the present government will help to bring about monetary and price stability in the system.

Nigeria expects oil output freeze -Kachikwu

By Daniel Adugbo with agency report

Nigeria expects oil producers to agree a supply freeze at a meeting in Doha in April which should stabilise crude prices even if Iran does not join, Minister of Petroleum Resources Ibe Kachikwu yesterday.

Kachikwu has been taking the lead in a global effort aimed at freezing the level of oil supply even though energy experts have cautioned that freezing oil supply may not likely lead to a rebound in the price of the commodity.

Top producers Saudi Arabia and Russia, as well as Qatar and Venezuela have embraced Kachikwu’s suggestion. Qatar has invited OPEC members and major non-OPEC producers to meet on April 17 to agree a freeze following an initial deal in February between Saudi Arabia, Qatar, Venezuela and non-OPEC member Russia to hold supply at January levels.

Kachikwu told Reuters in an interview in Abuja that, “I expect that we will reach a conclusion on stabilisation, stabilise current production as of January,”

It was not clear whether all 13 OPEC members including Iran would attend the Doha meeting, though Iranian officials have made it clear Tehran will not freeze output as it wants to raise exports following the lifting of Western sanctions.

But Kachikwu said Iran’s impact was limited anyway as the country would take time to ramp up production.