Nigeria: The Senate’s Bill to Improve Power Supply
The Nigerian Senate recently passed a bill to improve the power supply to electricity consumers in the country. The Electricity Bill 2022 is a follow-up to the report of the Senate Committee on Power. It aims to enable a legal and institutional framework that maximally harnesses the sector’s privatisation.
The partial privatisation of the electricity sector in 2013 led to the creation of six generation companies (GenCos), 11 distribution companies (DisCos) and the government-run Transmission Company of Nigeria (TCN).
Although the introduction of the private sector intended to improve investment and efficiency in the electricity industry, the sector is plagued with many challenges today.
The GenCos, DisCos, and the TCN face their respective bottlenecks that impede electricity supply to customers and the sector’s growth. These challenges include unavailable gas supply, poor network infrastructure and Aggregate Technical, Commercial and Collection (ATC&C) losses.
However, one of the most pressing concerns is the inability of the transmission and distribution sub-sectors to wheel and distribute generated electricity to customers.
The GenCos revealed in a 2021 fact sheet that despite the average power generation capacity being 6,336.52MW every month, the capacity put on the grid averaged at 4,118.98MW. This totalled 26,976MW of stranded power in 2021. However, the Senate’s Electricity Bill to improve power supply aims to reduce the stranded power in the sector.
According to Senator Gabriel Suswam, chairman Senate committee on power, the bill would improve the use of generated power through investments when passed into law. He added that the bill would encourage policies and regulations that enable the transmission network’s expansion and address the industry’s technological limitations.
However, the bill to improve power supply would not be the first intervention in the electricity sector. In fact, the industry has received over ₦2 trillion in investments post-privatisation.
One of these investments is the most recent Central Bank of Nigeria (CBN) intervention of $250 million (₦103 billion) to improve the rehabilitation of transmission and distribution infrastructure. In addition, there is also the CBN-funded Nigerian Electricity Market Stabilisation Facility (NEMSF) of ₦213 billion, among other interventions.
The apparent failures of past intervention programmes in Nigeria’s electricity sector have led to stakeholders’ opinions. As a result, some stakeholders have suggested that the privatisation process be reversed as the challenges continue to affect electricity customers in terms of poor electricity supply, tariff hikes and the increased cost of running alternate power generation sources.
According to Comrade Hassan Sunmonu, the pioneer president of the Nigeria Labour Congress (NLC), “Even with the privatisation, the government is still spending public funds on the sector. If not, the whole country would have been in total darkness by now. I’m 100% in support of the government reviewing the privatised power sector.”
So, if these past interventions have failed to increase the sector’s efficiency, what assurances are there that the Electricity Bill to improve power supply would be beneficial?
What frameworks would ensure the monitoring of investments to develop the electricity network infrastructure? And how can electricity customers in the country be convinced that this isn’t another inconsequential move to improve the Nigeria Electricity Supply Industry (NESI)?
Aisi Atiti [Nextier]