Electricity consumer group opposes N1.2tr bailout for GenCos, DisCos
The Electricity Consumer Protection Forum on Monday opposed the request by power Generation Companies (Gencos) and Distribution Companies (DisCos) for N1.2 trillion bailout from the Federal Government (FG).
The group’s National Coordinator, Mr Adeola Samuel-Ilori, made its position known in an interview with the News Agency of Nigeria (NAN) in Lagos.
NAN reports that the GenCos and DisCos had recently asked the FG to urgently inject the amount into the sector in order for their operations to survive.
Samuel-Ilori said that it was improper for privately-owned entities to be asking government for bailouts when they ought to be looking for investors to boost their operations.
He said: “It is only an organisation going through crisis of insolvency that may be bailed out or banks going under with depositors’ money.
“How can DisCos and GenCos, which are still current going concerns, be asking for bailout when they are supposed to have strong capital take-off base before venturing into the business?”
According to him, the government has invested so much in the power sector within the last five years, despite being largely privately owned.
Samuel-Ilori, therefore, advised the government to divest its 40 per cent equities from the DisCos to encourage more investors to come into the sector.
He said that this would make more funds available for other critical infrastructure and projects and at the same time, make the DisCos to be alive to their responsibilities.
Samuel-Ilori also faulted the recent decision by the Nigerian Electricity Regulatory Commission (NERC) not to conduct a public hearing for six out of eight DisCos.
The said DisCos were alleged to have breached Section 74 of the Electric Power Sector Reform Act (EPSRA) 2005.
He said the decision of NERC to exclude the affected companies from public hearing after they complied with its remittance directive was not in line with best practices in the industry.
According to him, those exempted from the hearing are, Abuja Electricity Distribution Company Plc, Benin Electricity Distribution Company Plc, Ikeja Electric Plc and Kaduna Electricity Distribution Company Plc.
He added that Kano Electricity Distribution Company and Yola Electricity Distribution Company Plc were also exempted from the hearing.
Samuel-Ilori said: “This is not acceptable to All Electricity Consumers Protection Forum and we will, in the next few days, forward our letter of rejection to them.
“Going by Section 74 of EPSRA, it doesn’t only contain remittance, but all encompassed fractions against the DisCos.
“Therefore, even if the so-called remittance has been met, the other paragraph in the section must be explained to us how they were met.
“We will invoke the provision of Freedom of Information Act to demand for all documents submitted and the commission notes at arriving at their decision.”