MAN, NERC to check electricity deficit at industrial firms

Piqued by the rising cost of expenditure on alternative power supply, Manufacturers Association of Nigeria (MAN) has urged the National Electricity Regulatory Commission (NERC) to address electricity deficit and distribution to industrial firms.

Following the rising deficit, MAN has concluded plans to resuscitate its plan towards building Integrated Power Projects for industrial clusters.

MAN noted that the project which has been pending due to advice by the then Power Holding Company of Nigeria (PHCN) that electricity was going to improve was suspended, but added that plans are underway to sign some Memorandum of Understanding with foreign companies that would help build it, in order to aid electricity needs of industrial clusters.

According to MAN, the lingering situation has resulted to a situation where manufacturers resort to generating their own electricity despite the huge cost that is associated with decision of industrial growth and development most especially productivity.

Specifically, MAN in its survey of activities in the manufacturing sector in 2014 stated that manufacturers expended N73.12 million on alternative source of energy on monthly average that year, noting that the cost is quite enormous as well as burdensome and could lead to massive shake-up in existing factories if not checked.

Speaking at an interactive session organised by MAN with National Electricity Regulatory Commission (NERC) in Lagos, President, MAN, Dr Frank Udemba Jacobs said poor electricity supply and its debilitating effect on industrial productivity, issues of high fixed charges and tariff rates have become worrisome to the real sector.

“MAN is always on the alert regarding developments in tariff because of the central position energy costs occupy in manufacturing total cost of product in the country”, he added.
He noted that the share of energy cost to total cost of manufacturing production hovers around 40 per cent over the years.

“MAN had always expressed its disapproval with the high electricity fixed charge and rates heaped on manufacturers in their various categorizations of D1, D2 and D3 especially as contained in the MYTO 2.1.

“Regrettably, this led some of our members in the steel sector subsector to take legal action against NERC and Distribution companies (DISCOs) on the contentious issue of implementation of MYTO 2.1 while MYTO 2.0 is still subsisting which we hope would be resolved out of court”, he added.

He noted that the creation of NERC as a regulatory agency has made some differences in the power sector, adding, “the commission has responded favourably to many of our prayers. NERC has demonstrated its commitment to work with MAN towards improving electricity supply in the country.

“This commitment was clearly made evident recently in the amended MYTO 2.1, which reduced the fixed charge of D2 user category following MAN’s submissions. Unfortunately this does not apply to other categories.

“Undoubtedly, MAN and NERC have formed a formidable partnership aimed at driving the important process of industrializing our nation. Our mutual relationship remains significant towards moving the manufacturing sector forward.

“We will continue to pursue all avenues that will lead to closer dialogues with a view to achieving our goal of energy sufficiency needed for the growth and development of the manufacturing sector”.

On his part, NERC Chairman, Dr Sam Amadi admitted the existence of challenges with electricity supply in the country, noting that there is no measure for the meagre supply they get.
“Some of our challenges is having to balance the needs of consumers with the needs of distribution companies. We are trying to encourage distribution companies to purchase their metres from manufacturers in Nigeria”, he said.

He stated that within the next two years, discos are expected to have installed metres in every home or institution where electricity is supplied.

Speaking on the issue of reduction in electricity tariff, he explained that only industrial and commercial estates got an increase, adding that after much complaints and verification, the situation was addressed.

He reiterated that some deduction occurred for industrial consumers and commercial in most of the Discos but at different percentages based on the collection loss level, adding that measures have been put in place to track metering in discos, saying “NERC no longer give certificate for importation of metres except when demonstrated that local quantity is not enough”.