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After N1.5tr intervention, TCN pushes for cost-reflective tariff


To avert further fruitless expenditure of public funds by the government on the country’s power sector, Industry players have hammered the need for Nigerians to get ready to pay cost reflective tariffs on electricity.

According to them, after, the sector’s reform six years ago, government has continued to sink about N1.5 trillion in to the sector to finance the generators, forgetting they can’t guarantee everybody.

The Chief Executive Officer of the Transmission Company of Nigeria (TCN), Usman Gur Mohammed explained that as long as Nigerians are not ready to pay cost reflective tariffs, government will continue to be in the middle and the sector won’t move forward, adding that monies meant for the development of other areas would continue to be sank in the power sector in futility.


Muhammed, who stressed this need in Lagos at the reconducting of the Ikeja west sub-station, noted further that sanctity of contracts in the sector was not effective owing to this fact, adding that when contracts are effective, everybody is bound by certain agreements.

The TCN boss, advanced that sanctity of contract can solve many challenges in the sector, and even the issue of load rejection can be resolved because when bilateral contracts are effective, failure to take the energy is paying for capacity, hence there would be no rejection.

“We therefore have to solve the problem of market issues, Nigeria has the cheapest electricity in West Africa and there is no relationship between poverty and payment of electricity.”

Giving his take on the reconducting of the Ikeja west sub-station, he explained that the line to be reconducted has 664 megawatts capacity of transformer, however the current volume stands only at 200 megawatts.


This according to him, necessitated the six months project of about N150 million that aims to increase capacity by 2.5 per cent and upgrade the transformer to 500 megawatts.

The facility, which is TCN’s largest sub-station, hasn’t undergone any upgrade of such in the last 40 years, and according to the Chairman of Ikeja Electric, the direct beneficiary, Kola Adesina, IE needs to have further symbiotic relationship with TCN to ascertain the level of disruption to expect.

But he pleaded that customers who are within these axis (Ayobo, Ogba, Alausa and others), through which the line runs should not suffer unnecessary outages. Adesina noted that IE has no fears about the El-Rufai committee because it has nothing to do with the ownership of the distribution assets.

“Since we took over these assets in 2013, government has not put in anything regards their 40 per cent shareholding in the running of the business, they have only subsided the sector in terms of the difference of cost of service and the tariff,” Adesina added.On the issue of right of way concerning the project which seem a major challenge, the Company has noted its partnership with the Lagos State government to ensure people who have built in the right of way be removed with no issues.


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