Power supply at risk as Gencos threaten to shut down

Power supply at risk as Gencos threaten to shut down

The Power Generation Companies (GenCos), have threatened to shut down power generation supply if pressing issues in the sector are not addressed.

The GenCos spoke through the Executive Secretary, Association of Power Generation Companies (APGC); Dr Joy Ogaji at a news conference in Abuja on Sunday.

Ogaji explained that the main reason for considering to take such action was due to the inability of Nigerian Bulk Electricity Trading Company (NBET) to honour agreement it had with GenCos.

She said GenCos were facing liquidity challenge due to NBET’s breach of the Power Purchase Agreement (PPA) terms. She noted that this was 100 per cent payment for power generated and supplied.

Equally important, NBET (Bulk Trader) is a trading licensee.

It is licensed and regulated by the Nigerian Electricity Regulatory Commission (NERC) to undertake bulk purchase; as well as resale of electricity in the Transitional Electricity Market.

Also, she accused NBET’s management of constituting itself as “the Alpha and Omega” authority that has the capacity to make or mar generation businesses in the country.

According to her, the situation is so bad that to remain in business and provide power to Nigerians; GenCos have to plead, lobby, and beg to be paid for power generated and utilised.

“NBET has now reduced its role to blackmailing and threatening GenCos investors and chairmen who have refused to concede to NBET’s illegal demand of a 0.75 per cent charge on invoices paid to gas suppliers.

“NBET has clearly threatened not to release payments due GenCos until they accede to NBET’s request; urging them to agree for a quid pro quo with the 0.75 per cent administrative charge.

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Prevailing situation will lead to shut-down of power nationwide

“The situation is truly grave and completely unprecedented as NBET has completely shed its role as a licencee of the industry and has taken on some sort of regulatory role.

“This singular action by NBET may lead to shutdown of power supply by GenCos; who have unanimously agreed to call the bluff of NBET. GenCos have, in addition to the mounting debts being owed; working under the harsh, unprofessional and unethical dealings from the NBET management staff.

“GenCos Chief Executives and other key staff all have a bucket full of tales of abuses, insults, aggression, nonchalance; non-responsiveness, bullish, belittling, and ostracising actions

“All these are geared towards intimidating the GenCos and keeping them at bay from seeking legitimate clarifications,” she said.

The executive secretary said the matter had been reported to the Nigerian Electricity Regulatory Commission (NERC) and other high authorities. But yet nothing had been done.

Furthermore, she called on the Federal Government through the board Chairman of NBET to review the professional conduct of the management of NBET and ensure that business etiquettes were instilled.

APGC seeks FG intervention

“In a nascent market as ours, there are processes entrenched in the Market Rules and other applicable Codes that should be followed in dealing with sectorial issues at all times. This is in order not to leave room for arbitrariness, duress or undue influence.

“The Power Purchase Agreement (PPA) clearly delineates the terms of the business relationship and expectations of the parties.

“NBET was designed to help smoothen these relationships; removing frictions which may exist between Gencos and DisCos.

“NBE was envisaged to occupy the space between GenCos and DISCOs; acting as a “shock absorber” in times of market turbulence and not to make it worse. “

Ogaji disclosed the sum of N600 billion the FG needed to pay GenCos through the Central Bank of Nigeria (CBN).

Further, she said that if that money was not released on time; it was likely to contribute to the shut-down of power generation in the country soon.

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