The Minister of Power, Works and Housing, Babatunde Fashola directed the Nigerian Electricity Regulatory Commission (NERC) to immediately step in to ensure that Electricity Distribution Companies (DisCos) improve on their distribution equipment and increase capacity. This is to enable them to optimize the use of electrical resources by the Generation Companies (GenCos).
The minister said the improvement in their distribution equipment and increase in capacity would enable the DisCos to take up the available 2,000MW difference between the generation capacity of the GenCos and the distribution capacity of the DisCos. He also directed the regulatory commission to stop DisCos from threatening private entrepreneurs from entering the market to supply consumers whom they are unable to supply. Instead, such entrepreneurs should be licensed by the commission subject to its terms and conditions “in order to promote competition and private sector participation. Also to avoid a private monopoly of power”.
Mr Fashola said, “If we take into consideration that, after five years of privatization, there are still people and businesses who do not have power or enough power, common sense and public interest demands that we must not resist ordinary people, small businesses like shops and markets from seeking alternative sources of energy.”
“The truth is that they already have these sources of alternative energy, in small petrol and diesel generators that cost them about N100 per kilowatt hour. If the DisCos are not resisting the generator sellers who are contributing to pollution, what is the logic of resisting small entrepreneurs bringing mini gas plants to supply a market need,” the minister argued. He also pointed out that the nation’s developmental needs could not wait “for businessmen who are not yet ready to serve”.
Urging NERC “to act with dispatch,” Mr Fashola said the stated policy statements were made in the national interest, public good, the need to support small businesses, provide access to power for ordinary people and increase productivity. He, however, added that although he was not unmindful of concerns about loss of market or customers by DisCos, such concerns must be balanced against national interest. He then assured that with improvement in their businesses, they would be in a position to use their economies of scale of large volumes of power to buy out or out-price the small entrepreneurs.
With these statements, the minister has encouraged independent power producers such as LuxxorPower to participate in the electricity market.
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