Fashola threatens to sanction Discos, Gencos over poor power supply

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Abuja – The Minister of Power, Works and Housing, Mr. Babatunde Fashola, on Monday tongue-lashed power distribution companies, as he decried their continued inability to deliver on agreed terms and threatened sanctions against the firms.

Fashola, who was visibly angry with the recent statements of the Discos, declared that the power firms had failed in many aspects and bluntly stated that complaints of obsolete infrastructure in the sector as alleged by the companies were unnecessary because they were aware of the state of these facilities when they purchased the assets.

The minister, who spoke at the 15th monthly meeting of power sector stakeholders in Jos, also demanded participants to cast vote on whether to carry on with the meeting every month or to put an end to it, as he expressed worry over the poor attendance to the forum.

Fashola was particularly pained by the actions of the power distribution companies, who according to him, were bent at frustrating the stakeholders’ meetings, adding that the Discos had failed in providing meters, electricity feeders, remit very poor revenue to the market and raise false allegations against government, amongst others.

Electricity distribution firms have faulted alleged plans by the Federal Government to escrow and centralise their revenue accounts over the poor market performance on their monthly remittances.

The Association of Nigerian Electricity Distributors (ANED) said such move would be a nationalisation of the 11 Distribution Companies (Discos), privatised three years ago.

The Daily Trust reported on Monday that the Discos owe N107 billion for services provided by six public owned service providers in 2016. One of the providers, the Nigerian Bulk Electricity Trading Plc (NBET) in its series of publications said the 11 firms paid far less than 40 per cent of their monthly energy invoices last year.

The Executive Managing Director of the Market Operator (MO), an arm of the Transmission Company of Nigeria (TCN), Mr Moshood Saleeman, in late 2016 told our reporter at a market participants’ workshop in Abuja that if the poor collection and payment level continued, the Discos’ revenue accounts might be escrowed to guarantee more power generation.

He said: “The remittance we get from the Discos is about 30 per cent and that is not good enough. It is not too impressive. We are talking about less than 30 per cent, we believe if we can do higher than that it will be better for the industry.”

Saleeman said although the Transitional Electricity Market (TEM) is not fully enforced, yet as the privatised firms are still growing, “The signal we are giving is that if they don’t comply, we will be forced to enforce the penalties like security deposits and even escrow the accounts of DisCos concerned.”

But ANED’s Director of Research and Advocacy, Mr. Sunday Oduntan, in a recent statement said, “Any attempt to centralise or escrow the Discos’ revenue accounts would be tantamount to nationalisation or expropriation of the Discos.”

The spokesman said any such action runs counter to the objectives of the National Electricity Power Policy, 2001 (NEPP) and the Electric Power Sector Reform Act, 2005 (EPSRA), of a private sector-owned and managed electricity sector.

“It would also send very wrong signals to domestic and international investors that Nigeria is not fully open for private sector investment and that we are still partial to the old habits of nationalisation, preventing the injection of the cheap and sorely needed capital that is critical to the rehabilitation and improvement of electricity infrastructure,” Oduntan explained.

He said it would be improper to have a, supposedly, private sector-owned and managed business in which the government now seized control of its revenues.

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