The 11 power distribution companies in the country are currently awaiting the final review of their performance deals with the Federal Government.
The assets of the DisCos, alongside those of the six power generation companies, were unbundled from the defunct Power Holding Company of Nigeria (PHCN), during the privatization of the sector in 2013.
The Federal Government had on January 1, 2015, signed the agreements with the power distribution firms, to keep a close tab on their operations.
Billed to lapse on the 31st of December this year, the review will help to ascertain the level of the companies’ performance.
The firms include Abuja Electricity Distribution Company (AEDC), Eko Electricity Distribution Company (EKEDC), Ibadan Electricity Distribution Company (IBEDC), Benin Electricity Distribution Company (BEDC) and Enugu Electricity Distribution Company (EEDC).
Others are Ikeja Electric (IE), Port Harcourt Electricity Distribution Company (PHEDC), Yola Electricity Distribution Company (YEDC), Kaduna Electricity Distribution Company (KEDC), Jos Electricity Distribution Company (JEDC) and Kano Electricity Distribution Company (KEDC).
Since last October, when the Bureau of Public Enterprise (BPE) Director-General, Alex Okoh, announced the decision of the Federal Government to scrutinize the affairs of the firms, Nigerians have been expressing their disappointment over the DisCos’ performance.
They said the firms were not living up to expectations due to poor electricity supply.
Nigerian Association of Energy Economists (NAEE) President, Prof Adeola Akinnisiju, said there was nothing wrong with the review, adding that it will promote efficiency.
Akinnisiju berated DisCos for their poor performance, stressing that the review will enable the government to discover the factors hindering DisCos’ growth and put in place measures to solve the problem.
He said issues, such as epileptic power supply and estimated billings, were major factors affecting the DisCos, urging the government to address them. He said when those issues were addressed, the sector will be able to grow.
Akinnisiju said: “Economies all over the world depend on constant electricity supply for growth and Nigeria cannot be an exception. The government had privatized the power sector to reposition the economy for better performance. The economy refused to grow because there was no power. When electricity supply is constant, the consumers would willingly pay their bills.”
He said the firms were selling power at outrageous prices and still pile up debts in the sector.
A report from the Office of Vice President Prof Yemi Osinbajo corroborated this assertion. According to the report, the DisCos were issued a total invoice of N161.4 billion for energy received in the second quarter of last year from the Nigerian Electricity Bulk Trading Company (NBET) and they paid N53.7 billion, creating a deficit of N107.7 billion.
The report stated that electricity supply was erratic as the country supply had an average of 3,975 megawatts (Mw) of electricity to its huge population, while 3,153 Mw was constrained from reaching consumers.
Association of Power Generation Companies (APGC) Executive Secretary Dr Joy Ogaji said the DisCos owe the GenCos for the electricity supplied to them through NBET.
Similarly, the President, Renewable Energy Association of Nigeria, Segun Adaju, said there was the need for the government to review DisCos’ level of compliance with contracts in the industry. He said when this happened, the firms will sit tight, since they knew that they will lose their jobs, once they were found wanting.
Privatisation of the power sector, he said, fell short of expectations in areas, such as industry improvement, efficiency and reliability. He confirmed that efficiency was below just what it was in the pre-privatisation era, stressing that the performance deals, must be reviewed.
He urged the government to monitor the activities of the DisCos, saying by so doing, the firms will know whether they were performing or not.
He said the firms delayed in issuing pre-paid meters because of their selfish motives, saying DisCos were not interested in issuing pre-paid meters, because it is more profitable for them to continue the regime of estimated billings. The DisCos, according to him, were ready to issue pre-paid meters once the tariff is hiked.
However, an industry source said the sector has recorded growth within the limits of the resources at its disposal. The source, who does not want to be mentioned, said the firms deserve a pass mark by the Federal Government.
The firms, he said, were preparing for the exercise, which will mark the fifth anniversary of their performance agreements. The firms are blocking the loopholes through which they could be found wanting, the source claimed.