Electricity: NIPE demands reduction in DisCos’ franchise areas to state-by-state basis

Following the lingering crisis in the power sector, Nigerian Institute of Power Engineers (NIPE), on Thursday, demanded for the reduction of the Distribution Companies (DisCos) franchise areas to state by state basis.

President of the institute, Israel Abraham, while speaking to journalists in Abuja, said that state by state basis would increase efficiency in power supply as each company would have enough funds to adequately invest to meet the needs of the consumers while the host state will find it economically convenient to partner as an investor with a dedicated DisCo.

He explained that there is a need to review, amend and harmonise the subsisting electricity legislations in Nigeria, drawing from lessons learnt since the enactment of the legislations and the privatisation of the power sector for more effective power sector reforms.

“Gas Supply and Aggregation Agreements (GSAA) should be entered into between gas suppliers and generation companies (GenCos) to guarantee gas supply and payments.

“By involving Nigerian Electricity Regulatory Commission (NERC), gas-to-power costs should be moderated to ensure affordability and sustainability.

“Power Purchase Agreements (PPA) should be entered into directly between DisCos, Transmission Company of Nigeria (TCN) and GenCos to guarantee power supply and payments.

“Inter-Ministerial Energy Committee for the Ministry of Power, Ministry of Petroleum, Ministry of Environment, Ministry of Water Resources and Ministry of Science and Technology should be set up to ensure maximum benefit of synergy within the energy sector,” he said.

He added that there should be intense promotion of incentivised investments in the exploration, exploitation, production and supply of natural gas in Nigeria.

NERC, the president, noted, should institute Energy Audit at all 33kv and 11kv among DisCos. And the power sector should be given a five-year foreign exchange concession to procure equipment and materials, while simultaneously but deliberately tasking, through incentives, indigenous power engineering professionals and manufacturers/investors to build capacity needed to produce all equipment and spares required to get the sector sustainable.

“Federal Government policy should drive the intensive industrialisation of the economy involving interconnected power pools and microgrids”, the institute, noted.

On the transmission side, NIPE felt that the Transmission Company of Nigeria (TCN) should be balkanised to make it more effective.

“There is a need to break up TCN to allow independence of the Independent System Operator (ISO) and the Independent Market Operator (IMO) for more effective and efficient management of the Nigerian Electricity Supply Industry (NESI).

The unbundling will thus require a massive funding mechanism by the Federal Government to support the TCN in bringing this about, and this should be considered a priority by the Federal Government.

“Nigerian Bulk Electricity Trading (NBET) should be phased out after satisfying the conditions precedent to bilateral contracts between willing buyers and willing sellers in the electricity market.”