Plan for dedicated power supply to Ikeja, Eko DisCos stalls

The plan to dedicate 100 mega-watts (Mw) of electricity supply daily to Ikeja Electric and Eko Electricity Distribution Company (EKEDC) from Egbin power plant has been stalled, The Nation learnt.

Sahara Power Group, owners of power plant, had two years ago, planned to dedicate 100Mw of electricity daily to Eko and Ikeja DisCos to boost power supply to Lagos residents, however, the arrangement failed to work out.

Its Managing Director, Kola Adesina, said the plan had been stalled. “Arrangement for dedicated supply to Ikeja and Eko DisCos is faced with the problem of the power sector. This brings to question what the directive principle of Nigeria is in terms of industrialisation and creation of prosperity.

“If industrialisation is what government is seeking, what naturally should happen is that the price of electricity should be made low through gas because Nigeria is a gas-centric nation and to that extent, the owner of that gas has that comparative advantage of that commodity. We shouldn’t be using import parity and pricing model for gas pricing in Nigeria. For me, government needs to find a way of intervening at that level such that the cost of electricity can reduce, such that industries can get electricity at an affordable pricing limit.

“Another policy option we can explore, which we are partially exploring currently, is cross subsidy; this policy will clearly make the industrial and commercial users of electricity pay more for gas, thereby cross-subsidising the customers on the street.

“While that policy is good, it has its inherent disadvantage, which is that the cost of electricity, as high as it is, will be passed on to the consumer. So, the higher the industrial and commercial users of electricity pay for the commodity, the more the price of the commodities and services they produce. So, it is a chicken and egg situation, which one comes first.

“For me, electricity should still continue to be the central focus of government in terms of ensuring that there is industrialisation, creation of employment, reduction of poverty and there is climate for the people that are entrepreneurial in nature to seek ways of creating solutions to better the quality of lives of Nigerians,” he said.

Adesina also noted that the legacy debt owed the firm has not been substantially paid. He said: “On the backlog of debts owed the organisation by the Federal Government through the NBET, the payment assurance scheme is helping a great deal to resolve part of the backlog payments but that notwithstanding, government is still owing us over a N100 billion. The payment assurance scheme is one which we are still looking forward to in order to ensure that the 100 per cent revenue we deserve, we get from the system. But the government is increasingly paying from the payment assurance scheme which we are benefitting from.”

He said when gas suppliers complain about not being incentivised, what they are saying is that in terms of contractual relationship, the contracts they have are with the generation companies and not NBET, “but the payment assurance scheme the government is implementing is one whereby the gas suppliers are paid first and we are paid next”. They get 100 per cent of their revenue and we get 80 per cent of our revenue from the pool of funds made available by the Bulk Trader.

“On gas supply, we are still explorating in terms of looking for ways of ensuring that the required gas is given to us to be able to get the power available to Nigerians as we are striving towards ensuring that at the end of this month, Egbin will install 1320 Mw,” he said.

Source: The Nation

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