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‘Cost-reflective tariff, deregulation will boost DisCos’

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By Muyiwa Lucas

 

To resolve the country’s power crisis, the Federal Government should fast-track the total deregulation of the power sector to motivate investors into all parts of it to guarantee quality power supply to consumers.

The Managing Director/Chief Executive Officer, Century Power Generation Limited, Dr. Chukwueloka Umeh, stated this at a virtual media meeting, themed: “The dilemma of electricity tariff regulation in Nigeria”, where he called for total deregulation of the sector and adoption of a cost- reflective tariff regime.

This, he explained, is the only way power Distribution Companies (DisCos) could attract the needed investment that would improve infrastructure. He noted that cost-reflective tariff would have a positive ripple effect on the power Generating Companies (GenCos).

Umeh said the government’s role should be limited to setting regulations that would attract investments into the sector and not regulations, which are stifling it.

He stated that poor infrastructure was affecting the capacity of the DisCos, the reason many people are not connected to the national grid. He added that out of the nine million registered customers across the 11 DisCos’networks, only half of them have meters.

Read Also: Electricity tariff hike not expedient – LCCI

 

He commended the government’s initiative in allowing private firms provide meters for consumers, saying this has allowed the DisCos to focus primarily on their core business.

The Century Power Generation boss was also emphasised that total deregulation would attract more players into the sector as evident in the telecom sector revolution.

The implementation of a new tariff by the DisCos was  put on hold, a situation, he said, elongates epileptic power supply.

Umeh advised the  government to hands off and allow operators to take control to make the sector work, adding that the entire value chain  needs overhaul.

“The only solution is complete relaxation of the regulations and allowing a free market to exist. Power is a commodity and a user should be at liberty to buy power from the grid at the tariff offered by a DisCo, or self-generate at a price,” he said, adding that consumers should not to see or treat electricity supply as a social service.

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