Power Generation to Reach 6,000MW in July

The Minister of State for Power, Hajia Zainab Kuchi, has disclosed that power generation will increase from its current 4,500 to 6,000MW in July and rise further to 10,000MW by December.

The minister made the assertion during a meeting with the Senate Committee on Power, where she disclosed that a whopping N347 billion would be needed for the transmission network as power generation increases.

According to her, even though the process of privatising the companies created from the unbundling of Power Holding Company of Nigeria (PHCN) had been completed, the generating and distribution companies that were bid for last year could not be handed over to successful bidders because the companies were currently not in good shape.
She added that the delay in putting the companies in good shape was caused by non-availability of funds, explaining that the power ministry had not received any budgetary allocation since January.

She however assured the lawmakers that all power companies that were bid for last year would be duly handed over to bonafide owners in December.

PHCN Privatization: Senator warns against asset-stripping

The Chairman, Senate Committee on Power, Senator Phillip Aduda, has urged the Federal Government to prevent investors from stripping electricity firms’ assets when the companies are finally sold.

Aduda, gave the advice while commenting on the progress made in the power sector at a stakeholders’ forum in Lagos. He urged the regulator of the sector — Nigerian Electricity Regulatory Commission and other agencies playing supervisory roles — to adequately monitor happenings in the sector to avoid cases of asset-stripping.

Asset-stripping is the sale of selected assets of an acquired company generally for the purpose of raising money to pay off some of the debt incurred in financing the acquisition. It is also the process of buying an undervalued company with the intent to sell off its assets for a profit. The individual assets of the company, such as its equipment and property, may be more valuable than the company as a whole due to such factors as poor management or poor economic conditions. Asset-stripping could also take the form of buying a company, and then selling off businesses it owns separately.

Power firms need N170bn to provide sufficient meters

The sum of N170bn will be needed to provide meters for all electricity consumers in the country, The Senior Manager, Market Analysis & Compliance, Market, Competition & Rates Division, NERC, Mrs. Kanneng Gwom, said this in a presentation made at a workshop on the power sector post privatization agenda in Abuja.

Gwom said that the calculation of the distribution companies showed that N170bn would be required to close the metering gap in the industry.

Six months after NERC gave electricity distribution companies the marching order to provide meters to all consumers within 18 months, 2.8 million customers out of the 5,172,979 in the records still do not have meters. This means that about 54.15 per cent of registered customers that consume electricity in the country do not have meters.

PHCN Privatisation: N170bn Workers’ Severance Pay Ready

Indications has emerged that the N170 billion meant for disbursement to workers of the Power Holding Company of Nigeria (PHCN) as settlement benefits to cover gratuities and pension of workers as agreed by both parties in negotiation for the transfer of ownership of the PHCN successor companies to their eventual owners is ready.

The Federal Government and the labour unions in PHCN finally resolved lingering issues that were threatening the progress of the power reform programme when they struck a deal late on the thorny issues of severance pay and pension for electricity workers after a meeting at the office of the Secretary to the Government of the Federation (SGF) in Abuja.

Speaking at the fifth national power summit organized by the Federal Ministry of Power in Lagos, the Permanent Secretary at the ministry, Dr. Dere Awosika disclosed that the funds for the settlement were ready and the Bureau of Public Enterprises (BPE) was already working out total cost.

Awosika explained that letters notifying the workers to forward details of their Retirement Savings Account (RSA) for onward transfers of their benefits will be issued out to the workers.

NERC Faults Budgetary Request for PHCN

The Nigerian Electricity Regulatory Commission (NERC) has said requests for budgetary provisions for the privatized successor companies of the Power Holding Company of Nigeria (PHCN) in the 2013 financial year by the National Assembly was unfounded.

NERC that such budgetary demands and justification for the Federal Government to fund the privatized electricity distribution companies beyond 2012 were not necessary considering the existence of the new Multi Year Tariff Order (MYTO-2) methodology. The commission said in a statement from its Assistant General Manager, Media, Maryam Abubakar, that the tariff methodology which was currently in use had provided for the distribution companies to be self-sustaining, stating that it could confirm that some distribution companies were actually meeting up with its financial obligations.

The House of Representatives had recently decried the lack of budgetary provisions for privatized PHCN successor companies in the 2013 budget.The House argued that additional funding for these electricity companies should be made despite the ongoing privatization process which would see new owners take over the companies by mid-2013. They had explained that there was a need to fund these companies in order for them to meet their capital spending obligations.

But NERC noted that the MYTO-2 was computed in a manner to allow the distribution companies pay for the energy delivered to them, meet up with their operational expenditures (OPEX) as well as their capital expenditures (CAPEX). The commission explained that statistics within its possession shows that since the introduction of the MYTO-2 in June this year, one of the companies, Eko Distribution Company was in November 2012, finally able to meet all its OPEX and CAPEX obligations, as well as settle its energy bill, all without subsidy intervention.