Loss making Nigerian power firms stall market take off

PHCN power installation

The Nigerian Electricity Regulatory Commission (NERC) has announced the postponement of the take-off of the Transitional Electricity Market (TEM), after chief executives of successor firms to the old PHCN complained about operational losses and other challenges.

NERC Chairman, Dr Sam Amadi, made the announcement in Abuja Wednesday on the sidelines of a stakeholders meeting with the new owners of the Distribution and Generation Companies (DISCOs and GENCOs).

Amadi said the implementation of the TEM was billed to take off in March but postponed following complains by the Chief Executive Officers (CEOs) of the GENCOS/DISCOS.

He said they complained not only about operational losses, but also challenges in gas supply and the need to review tariff.

“The CEOs agreed with NERC that it will not be realistic to declare TEM in March because of some of the market conditions which are yet to be resolved.

“TEM is a post privatisation phase whereby energy will be bought and sold based on agreements among stakeholders.

“It allows for the Nigerian Bank Electricity Trading (NBET) to purchase electricity from the GENCOs through Power Purchase Agreements (PPAs) and sell to DISCOS through Vesting Contracts.

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“TEM also allows the DISCOS and GENCOs to enter into agreement on how to buy electricity without going through NBET’’, he said.

Amadi said the postponement of TEM would be communicated to the Minister of Power to act accordingly.

He, however, expressed optimism that a new date would be announced soon by the minister when all the issues raised might have been resolved by the stakeholders.

He also noted that the Federal Government and stakeholders were already working hard to resolve some of the challenges like inadequate gas supply and improved service delivery to customers.

The Managing Director of the Transmission Company of Nigeria (TCN), Mr Mack Kast, said the TCN was working hard to ensure improved transmission of electricity to the DISCOS.

“I will like to say there have been some significant changes in the system in terms of power generation after the initial challenges’, he said.

He stressed the need to inject more funds into the TCN to address its infrastructural deficit and overall service delivery.

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