Foundation for Environmental Rights Advocacy and Development, FENRAD, a pro-democracy and environmental rights advocacy group said it has observed with dismay the recent power failure in Aba for over one week, caused by the fall out between Aba Power and Transmission Company of Nigeria, TCN.
The group in a statement said the event went contrary to all the promises of improved power supply and electric power sector efficiency Aba Power Limited, APL, a subsidiary of Geometric Power Limited, made to Aba residents following a landmark judgement awarded by the National Industrial Court of Nigeria ordering that all the assets belonging to the Enugu Electricity Distribution Company, EEDC in Aba ring-fenced area be handed over to APL.
AbaCityBlog recall that following the ruling and a subsequent handover ceremony officiated by the National Council on Privatisation, NCP and Bureau of Public Enterprises, APL, having got 9 local government areas of the 17 in Abia State, became the twelfth power distribution company (DisCo) in Nigeria.
FENRAD also recalled that when APL finally came on board having acquired EEDC assets with $26 million, there was jubilation that with Aba ring-fenced area now carved out from EEDC, power generation and distribution would be seamless.
In a statement signed by Comrade Nelson Nnanna Nwafor, FENRAD Executive Director, however charged the electricity distribution company to live up to expectations which Aba residents have on them when they took over from EEDC.
The statement read:
In a news material sighted by FENRAD, Alex Okoh, the DG of Bureau of Public Enterprises said they were handing over Aba ring-fenced area to a “very tenacious investor who has made a firm investment to transform the Aba ring-fenced area into a model electricity franchise, providing quality, stable and appropriately priced electricity to consumers…”
In fact, in one of their own releases, APL promised to improve electricity supply in the Aba ring-fenced area by leveraging its assets, including a Shell gas plant at Owaza, and other facilities to boost supply.
In a radio phone-in programme FENRAD monitored, an APL staff member had said APL would generate and distribute power to its consumers and was ready for business (it was to be both GenCo and DisCo). Even Prof. Bart Nnaji, chairman of Geometric Power Limited was quoted in the Cable News as saying:
“We have made the necessary investments required to not have any issue in terms of reliability of power supply. So, we have invested about eight times the amount of the acquisition already.”
Nnaji went ahead saying APL had built new substations and power lines (140 km), including a gas pipeline to ensure uninterrupted supply from Shell gas plant, Owaza, Ukwa West.
Aba residents rejoiced even more when they were told that the $500 million-worth Geometric Power Limited would ensure over 140 MW of power supply a day, but events of past weeks leave much to be desired, far from these flowery promises, so FENRAD wonders what hindered APL from bettering the record of EEDC before it.
From further findings, FENRAD discovers that six months after officially taking over the Aba ring-fenced area, Aba, known as manufacturing hub of the Southeast, is still facing a massive power undersupply due to challenges (largely technical and financial) facing APL. From being supplied less than 30MW per day before now, Aba was supplied total darkness last month.
Barring December of last year (2022) when APL was able to supply about 100MW daily, supply had become epileptic by February of 2023. FENRAD laments that businesses had gone under as a result of the last power crisis Aba faced. Aba business owners, especially small-scale businesses trying to recover from the recent cash crunch occasioned by CBN’s cashless policy got hit badly.
There are many players in the power supply chain, FENRAD observed. There are the generation companies, otherwise known as GenCos; also the transmission companies otherwise known as TCN; then the distribution companies, known as DisCos. There is the NBET, Nigerian Bulk Electricity Trading Plc incorporated in 2010.
The NBET, pursuant to the Electric Power Sector Reform Act of 2005, is mandated to buy power in bulk from Independent Power Producers (IPP) and successor generation companies (GenCos) of the PHCN, a behemoth that enjoyed monopoly in generation, transmission, distribution and supply of electric power before 2013 when it was unbundled.
The NBET bulk purchase is done under the Power Purchase Agreement, PPA since the NBET had been issued Bulk Purchase and Resale Licence by the regulatory body, the Nigerian Electricity Regulatory Commission, NERC.
The NBET is 100% owned by federal government. Its funds come from taxes and it buys power and resells to DisCos, International and Eligible Customers while carrying out its role as “Pool” administrator for electricity market in Nigeria.
From available sources FENRAD gathered that APL underbuys power from NBET and then resorts to estimated billing to make money off Aba residents and businesses. A further finding by FENRAD says the reason adduced for short supply of power before the eventual outage was that Aba consumers owed APL N2bn, hence their inability to offset an outstanding debt of N896m to transmission company, TCN.
This is a sad development because FENRAD could not sight any published record from APL anywhere to back its debt claim. It has to be understood that other DisCos within the nation are owing TCN too, but were not disconnected from the national grid the same time with APL.
In an issued order of March 20, 2023 with details: No:TCN/ISO/MO/2023/001, the Nigerian Electricity Market Operator threatened to disconnect 13 market participants (MPs) including DisCos and GenCos. Mentioned among the MPs as DisCos were: Benin Disco; Jos DisCo; Ikeja Electric; Kano DisCo and other DisCos. Mentioned in the GenCos were: Aba Powers Limited; Niger Delta Holding Company plants and Paras Energy.
A This Day online publication of January quoted the SA to the president on infrastructure, Mr. Ahmed Zakari, as saying that the sum of N120bn was used in subsidising power consumption which went to the DisCos. The president’s aide said the subsidy was for end-users in low brands of C, D and E. Was Aba not part of that 2022 subsidy, FENRAD asks APL?
All the findings by FENRAD show that there’s no difference between the APL and parent bodies in Aba. Sad as it is, contrary to the Order on Capping of Estimated Billing issued in 2020, APL has not been able to meter Aba end-users. Estimated billing has remained a norm, FENRAD laments.
There had been national metering programme before now, including a promise to begin another phase soon, with 4 million consumers to be metered, FENRAD fears APL may not achieve much going by recent developments.
According to Electric Power Sector Reforms Act of 2005, DisCos are expected to meter end-users before they can charge or disconnect them. Writing TCN to disconnect Aba consumers, some of whom are unmetered, as APL did, could be the height of insensitivity.
FENRAD calls on the state Government to look into this problem. Before now electric power sector used to be in the exclusive list of the constitution, but recent amendment thereto made states players today.
FENRAD calls also on, Federal Ministry of Power, National Electricity Regulatory Commission, NERC and other major players in the industry to ensure this experience doesn’t occur again, because hospitals, banks, security agencies and hospitality businesses were held back by the Dark out
APL kept Aba in the dark not holding town hall meetings with her consumers to appriase them of all the developments before the disconnection.
APL needs to do its fieldwork and legwork properly Capturing the Aba electricity demographics will go a long way Knowing the number of metered and unmetered consumers be they businesses or residences is the way to go.
This will help bring unmetered consumers to the register and also help expand revenue base of APL; there must be a way the players before APL navigated what is now Aba ring-fenced area, it cannot be beyond APL. FENRAD truly understands APL is in business and pray it succeeds too.