New tarrif hike to address infrastructure decay in power sector
Alhaji Mohammed Modibbo, the Managing Director of Jos Electricity Distribution Company (JEDC), says the new hike in electricity tariff is to address decades of neglect of critical infrastructure in the power supply chain.
Modibbo told the News Agency of Nigeria (NAN) in Jos on Tuesday that the new investors in the power sector inherited dilapidated infrastructure which must be replaced to enhance efficiency.
“Some transformers were even older than 50 years and certainly could not cope with even basic distribution.
“So the little upward review will help to mitigate negative cash flow that has bedevilled the sector,” he said.
Modibbo spoke against the backdrop of nationwide picketing of electricity formations by labour unions protesting the recent tariff hike that took off last week.
He said that increased power generation by the private firms was being hindered by the inability to pay their gas suppliers.
“This in turn constrains the wheeling capacity of the Transmission Company of Nigeria as it has no revenue to rehabilitate, replace and expand grid infrastructure.
“The distribution companies also get the heat because without adequate funds, they cannot procure meters, extend distribution networks and provide improved customer service options of automated vending, online billing payment and setting up of customers centres,” he said.
The JEDC boss said that even with the increase, the cost of self-generated power, currently estimated at between N45-N70 per kilowatt, was still significantly more than the cost of grid power.
“And this is without considering the additional benefits to our environment of minimising the use of generators and reduction in their related emissions and pollutants,” he said.
Modibbo said that the price of electricity would eventually crash when critical factors were put in place.
He said that the search for stable electricity must be seen and treated as a “long journey with potential bumps and possibly some diversions”.
“It must be a journey in which we all work together as a team to achieve objectives.
“Working as that team requires that we are all expected to own respective responsibilities, as such, customers must own the responsibilities of paying for power that they consumed,” he said.
Modibbo urged the organised labour to embrace dialogue and avoid actions that could stall the progress being recorded in the power sector.
“The organised unions must join hands with the Federal Government and the power sector operators as we continue to work to improve the supply of electricity in the country.
“For the first time in the history of Nigeria’s power sector, electricity generation has hit an all-time high of 5,075MW, demonstrating the evolution and progress in the capacity of the sector to meet the country’s power needs,” he said.
Modibbo said that a stable power sector was a major requirement in the drive to grow the nation’s economy and improve the quality of life.
“It is also crucial to note that Nigeria’s growth has been crippled for too long by decades-old deficiencies in the power sector.
“Private sector-driven efficiency and realistic market prices can and are already giving the sector a new lease of life.
“The recent attainment of 5,075MW generated, transmitted and distributed has to be viewed in the context of a sector that barely generated 2,000MW, prior to the start of the sector reforms, a little over five years ago.
“We believe that this is only the beginning and that we can accomplish much more improvement in the sector if all the stakeholders work together in partnership.”
He stressed that it was a demonstration of concern for the customers and the need to work together that fixed charges were removed from the new tariff regime.
“The removal of the fixed charges constitutes a revenue risk to the operators, but it is a risk that we are prepared to take as necessary to ensure that affordable, sustainable and appropriately priced power is delivered to your homes and businesses.”
Modibbo craved for more understanding from the unions and the customers, stressing that all were being done to help the nation’s quest for sound and stable power that would speed up its industrialisation process.