To ensure efficient power supply to the over 10 million registered electricity consumers, the Nigerian Institution of Power Engineers (NIPE) has urged the federal government to create 37 Distribution Companies (DisCos) for the states and the FCT.
Speaking during a press conference in Abuja on Wednesday, president of NIPE, Engr Israel Abraham, said the current arrangement with 11 DisCos, where some had over four states in their franchise areas, had contributed to the poor power supply as it was too big for the operators to handle.
Engr Abraham noted that the Nigerian Electricity Regulatory Commission (NERC) could create a state-by-state franchising for the DisCos which would help the operators to manage the system better and have state governments investing more in the networks.
He said, “There is a need to renegotiate the DisCos’ franchise areas to more manageable sizes. State-by-state basis for franchising is recommended. This will increase efficiency in power supply as each company will have enough funds to adequately invest to meet needs while the host state will find it economically convenient to partner as an investor with a dedicated DisCo to make life better for its citizens.”
NIPE also disapproved of the current regulatory strength, saying it was weak.
Abraham said, “Nigeria has a weak regulator at the moment. The regulator alone would have been strong but for the political hindrances. It (NERC) is yet to master the game of balancing regulation and politics.
“NERC is not able to enforce its own regulations and the frequent government interference has led to confusion in the power sector and is complicating the problems.”
The institution also sought a directive by NERC to the system operator to coordinate Generation Companies (GenCos) and the Transmission Company of Nigeria’s (TCN) expansion and maintenance programmes to ensure that there is a time during the year, a minimum of say 6,000MW of generated power and TCN wheeling capacity.”
Also in the long run, NIPE backed the splitting of TCN into the Independent System Operator (ISO) and the Independent Market Operator (IMO) for more effective and efficient management of the electricity market.
Abraham further said, “The Nigerian Bulk Electricity Trading (NBET) should be phased out after satisfying the conditions precedent to bilateral contracts between willing buyers and willing sellers in the electricity market.”
The engineers also urged the federal government to grant the power sector a five-year forex window for the importation of equipment and spare parts, while tasking experts to build local capacity.
