• Minister says liquidity will resolve power sector challenges
• NDPHC declares Calabar GenCo best power plant
Nigeria Governors’ Forum (NGF) has urged the Federal Government to stop the payment of electricity subsidy, saying it is “ineffective”.
However, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, declared that liquidity is the major solution required by the troubled power sector.
This was as the Managing Director of Niger Delta Power Holding Company (NDPHC), MrChieduUgbo, informed the Senate Committee on Power that the Calabar Power Generation Company is the most functional power plant in the country.
The 36 governors made the call, yesterday, in a document entitled ‘Development of the National Integrated Electricity Policy and Strategic Implementation Plan: Policy Recommendations by State Governments to the Federal Ministry of Power’.
“Electricity is a commodity and a product that must be paid for by consumers. The states believe that electricity subsidy and other forms of financial interventions in the power sector by the Federal Government over the last 15 years have been ineffective so far.
“Rather than improve the quality and reliability of service, subsidies in the sector have been applied to cover inefficient costs and lack of service by Distribution Companies (DisCos), Transmission Company of Nigeria (TCN), Generation Companies (GenCos) and gas producers across Nigeria’s Electricity Supply Industry (NESI).”
NGF said in the document that the state governments recommended a series of policies to tackle the challenges within the power sector.
The recommendation comes when regulatory authority is being transferred to states.
Last month, the Nigerian Electricity Regulatory Commission (NERC) transferred oversight of the electricity market in Ondo, Ekiti and Enugu to each state’s electricity regulatory bureau.
According to the document, the states recommended that wholesale and retail electricity subsidies to customers and across the NESI value chain be reduced and eventually eliminated over time.
The need for liquidity in the power sector was canvassed by the minister in his submission to the committee investigating the controversial Make Up Gas (MUG) Reprocessing Deal Involving the Ministry of Finance, NDPHC, Calabar Generation Company Limited and ACUGAS Limited.
The minister, through his Special Assistant, DahiruMoyi, said the agreement on gas supply between NPDHC and ACUGAS was inherited by former President Muhammadu Buhari in 2015 since it was signed in 2011 during President Goodluck Jonathan’s administration.
He said, “Just as the Ministry of Justice was unaware of the contract agreement, the Ministry of Finance was also not part of it from the beginning. However, since the government is a continuum, the finance ministry later came to facilitate the required liquidity.
“The issues on the ground about contracts being investigated by the Senate Committee on Power is not about restructuring, but providing the required liquidity, which the finance ministry is doing through collaboration with Nigerian Liquefied Natural Gas (NLNG).”
In his submission before the committee, Ugbo said the company, as a result of the gas supply agreement with ACUGAS, was taking gas from three out of five units and generating power from the Calabar plant to the national grid, which, according to him, is the best power plant in the country.
Chairman of the Senate committee, Enyinnaya Abaribe (APGA, Abia South), thanked the stakeholders for making things clear for the committee but added that the investigation was still ongoing.
