The Association of Power Generation Companies (APGC) is happy with the declaration by the Minister of Power, Works and Housing, Mr. Babatunde Fashola that bulk customers who are willing and have the capacity can procure power directly from the Generation Companies (GenCos) bypassing the Distribution Companies (DisCos).
At a press briefing in Abuja Wednesday, the APGC Executive Secretary, Mrs. Joy Ogaji said the move, tagged, ‘Eligible Customer’, will encourage competition and liquidity in the power sector.
According to her, there was no need starving willing and buoyant customers of power that was sourced from Discos, saying they (DisCos) can work harder to improve power supply beyond the daily allocation they get for their franchise areas.
“DisCos are actually able to get power through this arrangement on the grid. Those DisCos willing to get additional power qualify as Eligible Customers as well.
“If they have more customers and are not getting enough due to the strict national grid allocation, they can ask for extra power. In that case, a DisCo will need a bilateral contract not with the Nigerian Bulk Electricity Trading Plc (NBET) but with a GenCo, and the Transmission Company of Nigeria being the third party,” she explained.
The APGC boss added that the declaration will boost liquidity in the power sector and stimulate more competition for the DisCos, the Transmission Company of Nigeria (TCN) and the GenCos to serve customers for the better.
The eligible customer directive is yet to commence as she said the Nigerian Electricity Regulatory Commission (NERC) is working on the framework that that will address registration and tariff setting among other conditions.
APGC also confirmed that GenCos now operate fewer turbines to generate power based on the quantity of gas that they can pay for.
“To procure gas, we need money. Currently, GenCos are owed N600m and gas companies owed nearly N200m. Most gas suppliers say they can’t supply anymore until we pay. “Most of them like Shell, Total offer pay-before-service routine and the electricity market is only remitting about 30 per cent. Most of the GenCos can’t operate all their machines; it depends on what they can pay. We are in that state, a precarious and pitiable one,” she lamented.