Power outages: FG blames menace on attack on pipelines

As Nigerians continue to groan under the effect of epileptic power which has continued unabated within the last months, the Federal Government (FG) has blamed the menace majorly on gas shortage occasioned by attacks on pipelines.

It said the attacks on the pipeline especially owned by Agip and the Nigerian National Petroleum Company Limited (NNPC) had cut supply to power plants.

Speaking at a briefing on Wednesday on the state of the current state Nigerian Electricity Supply Industry, the Chairman, Nigerian Electricity Regulatory Commission (NERC), Engr. Sanusi Garba said although low water from the hydros was a contributory factor, this does not explain the very low level of generation.

“There has been a lot of concern or that oh, this is because it is the dry season and Hydros are down and so on. Now for clarification, in October 2021 Hydros were doing about 1,350. They are down to about 1100 But that’s not enough to clearly explain why there are so many outages across the country,” he said.

According to him, during the dry season when hydros are down thermal plants which currently contribute about 80% of the generation capacity ramp-up to cover the shortfall of the hydros.

However, he said: “At the time of the year when the gas plants are supposed to increase generation we have had a number of multiple events that contributed to the lack of capacity to deliver on the shortfall in generation capacity starting by the power plant owned by AGIP and NNPC.

“That was an act of vandalism the pipeline that obviously to subdue generation in those plants.”

On the other hand, he admitted that the Nigerian Bulk Electricity Trading Company (NBET) was owing to the electricity generation companies (GenCos) legacy debt.

But stressed that on an ongoing basis NBET pays the generation companies adding that in terms of the settlement, GenCos receive a subsidy from the government.

“occasionally there may be delays, one, two weeks, three weeks and so on. But in the course of an ongoing business, you will see that’s the reason why I cannot perform or that’s the reason why this thing is killing my business.

“Because there is billing cycle and then a lot of invoices of the generation companies. Also, in terms of the settlement, they do get payment from the subsidy that government provides for the industry itself.

“The subsidies administered through NBET, and therefore, quite a bit is the money that is in sport, then they wait for the money to come from the Treasury so they can pay the balance. Now so this is just in the course of normal business,” he said.

Similarly the Ministry of Power in a statement signed by the Media Aide to the Minister of Power, Engr. Abubakar Aliyu said the current energy crisis confronting some key sectors of the economy also contributed to the problems we are facing now in the power sector.

Apart from pipeline vandalism, it said routine maintenance of power generating plants had also contributed to the current power outages.

“We are where we are today also because of the increasing vandalisation of pipelines that also supply gas to the power plants. This too is being resolved in collaboration with the relevant agencies. NNPC and other gas suppliers are working relentlessly to restore gas supply for optimum power supply.

“Government is doing everything working with the relevant security agencies — to stop vandalisation of pipelines.

“These challenges do not in any way indicate that the ongoing rehabilitation of the national grid by the government is not yielding results,” he said.

Meanwhile, GenCos has told NBET to play its role as a creditworthy off-taker and buffer in the industry.

They were reacting to claims by the NBET stating that it makes payment to GenCos as at when due and has never defaulted on any payment cycle to date.

The Executive Secretary, Association of Power Generation Companies (APGC), Dr Joy Ogaji in a statement said NBET was owing huge sums of unpaid invoices on energy generated and consumed for the period 2016, 2017, 2018.

She said the sum was in addition to other outstanding such as true-ups, deemed capacity among others.

“GenCos have severally engaged NBET on what modalities it has in place to deal with the outstanding and they have said such will be handled by NERC through a bond.

“It is therefore puzzling to hear NBET saying they are up to date with our payments and on another breath say that they have paid us 80%. The huge debt profile has so increased that even the PSRO from the World Bank is now inadequate to deal with and with no clear line of sight of alternatives,” she said.

She stressed that the indebtedness of the bulk trader to GenCos as well as the misalignment of receivable and payable days, has aggravated the liquidity challenges faced by the generation companies and underscored the need for working capital loans for most of them.

“Furthermore, the GenCos are operating under very harsh monetary and fiscal conditions, occasioned by the economic realities that face the country today.

“Consequently, the GenCos are unable to meet their gas obligations which account for the shutdown of gas supply to the thermal GenCos without payment,” she said.

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