Failure of the eligible customer policy of the power sector to impact positively on supply and usage in the country, five years after it was introduced, is not only frustrating, it has emphatically underscored the failure of privatization of the sector. The development should be worrying to the federal government, and to Nigerians generally, given that electricity supply is one of the most basic recipes for the political and socio-economic growth of the country.
When the federal government introduced the eligible customer policy, it was meant to address the dismal state of electricity supply in the country, and improve the performance of the distribution companies (DISCOs) and the generation companies (GENCOs). Five years down the line, nothing significant has changed in that sector. Rather, the situation has increased the level of frustration of Nigerians over worsening power supply; and with repeated grid collapse and load rejection, stakeholders are right to be worried that the policy remains a mirage.
The eligible customer regulation introduced in 2017 permits electricity generation companies (GENCOs) and independent power producers (IPPs) to by-pass the Nigerian Bulk Electricity Trading Plc (NBET) and DISCOs to sell electricity directly to classified customers. It was expected that the policy would encourage competition in electricity supply, promote rapid expansion of generation capacity, as well as create atmosphere for improvement in quality of supply among others.
Ever since the partitioning of Power Holding Company of Nigeria (PHCN), it has been most the difficult to harmonise and coordinate electricity supply. Nigerians have to worry over stranded electricity as over 9,000 megawatts installed capacity could not be evacuated due to transmission and distribution bottlenecks. This has also seriously exposed the limitations and incapacity of Transmission Company of Nigeria (TCN) and the DISCOs. Electricity remains an instantaneous product that must be evacuated and utilized on production. The resultant low performance that has characterised the DISCOs and GENCOs remains in sharp contrast to the assurances given to Nigerians as benefits of privatisation. The development is even more pathetic when load rejection has become synonymous with some distribution companies due to infrastructural deficiency.
The frustration thereby engendered by poor electricity supply in the country is huge to industries, commercial enterprises and small and medium-scale outfits in particular. The collateral damages cannot be underestimated. The poor power situation has adversely impacted on industrial productivity and worsened unemployment situation in the country.
The projection that regular electricity supply across the country would create a window of development in the country has sadly, continued to slip from Nigeria. A lot of industries now rely on self power generation which in the long run affects the cost of production, forcing companies to fold up, unable to cope with the rising cost of diesel.
Not too long ago, the president of Africa Development Bank (AfDB), Akinwunmi Adesina lamented that the country loses 29 billion dollars yearly which is about 5.8 per cent of its Gross Domestic Product (GDP) due to lack of reliable power supply. Aside company’s tales of woe, most Nigerians no longer enjoy basic household items such as refrigerators, fans and air-conditioners as those items have become artifacts due to blackouts.
The situation of poor electricity supply is more confounding because the federal government has, despite the privatization spent billions of naira of public funds in developing the National Integrated Power Project (NIPP) to stabilize the electricity supply system in the country under the electricity power sector reform Act (EPSRA) of 2005. In real terms, the money spent, along with other interventions, has made no visible or concrete impact on the power system.
The power sector in Nigeria being largely in the Exclusive Legislative List, and therefore the duty of the federal government, it is imperative that both the presidency and the National Assembly revisit that sector with a view to making necessary amends where possible. Else, the entire privatization exercise should be reviewed. It is understood that there will be huge collateral damages for the country if the matter is not carefully handled, in view of the peculiar provisions of the privatization agreement. Yet, it will be irresponsible of government to fold its hands and watch the slide of the country into collapse engendered by power sector failure. The eligible customers policy seems to be bungled by lack of political will by government to make it work.