HomeIndustry SectorsFinance and PolicyNigerian GenCos threaten shutdown over fees

Nigerian GenCos threaten shutdown over fees

Electricity generation companies (GenCos) have said they might be forced to shutdown their plants nationwide over a ‘new policy’ of the Nigerian Bulk Electricity Trading Plc (NBET).

The GenCos, through Joy Ogaji , executive secretary of their umbrella group, the Association of Power Generation Companies (APGC), said in Abuja on Sunday that the federal government must prevail on the NBET to rescind its insistence on its “unilateral and arbitral directive.”

In September, bulk trader NBET, had directed all thermal GENCos to comply with its directive to submit their respective board approvals or resolutions affirming commitment to pay 0.75% administrative charge on all collated and submitted gas and transportation cost invoices to the Central Bank of Nigeria (CBN) for payment.

The APGC claimed that the NBET had demanded the administrative charge from the GenCos in order to access a N600 billion ($2 billion) Federal Government intervention fund.

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The GenCos however, rejected the alleged fee, arguing that there was no policy directive to that effect by the Nigerian Electricity Regulatory Commission (NERC).

Ogaji said the move might lead to the shutdown of power supply by GenCos, who had unanimously agreed to “call the bluff of NBET.”

She said: “The situation is truly grave and completely unprecedented as NBET has completely shed its role as a licensee of the industry and taken on some sorts of regulatory role. The entity is almost conducting itself in a manner that suggests that it is above the law.

“If NBET’s excesses are not checked and the N600 billion fund is not released in time, whether we deliberately shut down or not, the machine would shut down. Gas suppliers have stopped giving gas to some of the GenCos. The earlier the money is released, the better for us all.”

Ogaji recalled that the electric bulk buying firm was introduced into the market as a service provider with a mandate of making the generation business viable, but alleged that it had since abdicated its role. She urged government to revert to the Market Operator (MO) while the NBET focuses on engagements with new entrants or prospective power project developers.

“GenCos have not been better off in terms of productivity since NBET was created. From 1 February 2015 that NBET took over till date, no GenCo has received 100% payment for power generated and supplied. This marriage needs to be dissolved because the reason for the marriage has not been fulfilled. Instead of getting better, it is getting worse because NBET has carried on as a quasi-regulator,” Ogaji added.

She said government, especially the board chairman of NBET, must review the “professional conduct of the management of the agency to ensure that business etiquettes are instilled,” adding that this should be done in line with the current administration’s vision of providing an enabling environment and leveraging the ease of doing business index in Nigeria.

Source: The Guardian