DisCos decry botched N100bn electricity subsidy, transmission constraints

The 11 electricity Distribution Companies (DisCos) have decried the failure of federal government to provide a N100 billion subsidy it promised after private investors took over about 18 power sector utilities on November 1, 2013.

The DisCos faulted the poor funding for the transmission section of the sector, which they said has resulted in the huge load rejection cases.

This was stated in a statement by the Director of Advocacy and Research, Barrister Sunday Oduntan of its umbrella body, Association of Nigerian Electricity Distributors (ANED) in Abuja on Monday.

It said the government which holds 40 per cent equity in the utilities stated many interventions in the Performance Agreement of DisCos with the Bureau of Public Enterprises (BPE).

To date, the government has not met the privatisation transaction foundational requirements of providing N100 billion in subsidies; payment of MDA electricity obligations; ensuring that the DisCos have debt free financial books; and implementing a cost reflective tariff,” it said.

On transmission constraints, ANED doubted if the N50 billion appropriated for TCN in the 2016 budget was released by half adding that, “This funding level is even more pitiful when, especially, measured against TCN’s estimate of $7.5 billion for its five-year expansion plan that is expected to take us to 10,000 megawatt (mw), from our current 4,500mw.”

The DisCos said they can only recover their costs when they have more energy delivered by the Transmission Company of Nigeria (TCN) in the area where they have customers.

“Should the DisCos have to suffer financial losses due to the limitations associated with TCN’s wheeling constraints? They queried in the statement.

ANED said TCN which is still a public utility “has remained underfunded over several decades.  Such limited or underfunding has resulted in poor transmission infrastructure and planning, with the consequences of grid instability and limited wheeling capacity, adversely impacting the distribution and generation of electricity.”

They decried the continued dearth of TCN funding saying it impedes the DisCos’ ability to distribute power and has led to crashes in power turbines of Generation Companies (GenCos) due TCN consistent requests for de-loading.