Policy direction needed to salvage power sector investment, says TCN

The Managing Director of Transmission of Nigeria (TCN), Usman Mohammed has said investment in the Nigerian Electricity Supply Industry (NESI), particularly in transmission network risks further losses, if the Federal Government fails to provide policy direction that will address the lack of asset by distribution companies.

Speaking yesterday in Abuja during a tour of some affected facilities, Mohammed said about five transmission transformers, worth $10 million were recently affected by the prevailing situation.

According to him, current expansion programme and other planned investment in power transmission would be endangered unless commensurable investment is made by the DisCos.

“Let me tell you why we are having problem with these transformers. The distribution companies are not investing in their networks and because of that, most of these transformers supply customers directly without protection between our equipment and that of distribution companies.

“We are calling on government to provide a policy direction that will lead to the capitalization of the DisCos. We are equally calling on Nigerian Electricity Regulatory Commission (NERC) to do a regulatory order that will lead to the capitalization of the DisCos, Mohammed said.

He disclosed that though the country has about 730 interfaces between TCN and DisCos, only 221 of the interface is fully protected.

Mohammed said: “We spend about $2 million to procure a transformer. We lost five recently. The loss is a lot of money and we don’t want these to continue.”

The MD noted that the distribution arm of the industry pose a critical challenge to the overall progress of the sector.

“The electricity business is connected. If the DisCos do not perform, it will affect TCN, and can equally affect the GenCos,” Mohammed said.

Though the DisCos have insisted on an upward review of tariff, Mohammed downplayed the agitation; noting that the challenges confronting the sector were not all about review of tariff.

“To have a good tariff is good but if you look at the DisCos, how much of the current tariff are they collecting? I don’t believe in the argument that tariff is the problem because capacity is another issue. If they are collecting 100 per cent of the current tariff, we would have been able to move forward,” he noted.

The MD stated that a new policy adopted by the organization to empower in-house engineers, has resulted in cost and time reduction.

Mohammed said the engineers had recently resuscitated affected transformers across the country.

“With our engineers, we won’t spend N5 million to fix this transformer. We do to take them to Lagos. The cost of transporting alone cannot be less than N15 million. If the transformer gets to Lagos it will take as long as six months before fixing it. That is why we are empowering in-house engineers to take care of the transformers,” he stated.