The 11 electricity distributions companies (Discos) in Nigeria’s power sector on Wednesday alleged that the inability of the Transmission Company of Nigeria (TCN) to wheel maximum generated electricity to their respective networks was costing them a monthly revenue of N1 billion.
The Discos spoke through their platform, the Association of Nigerian Electricity Distributors (ANED) in response to TCN’s recent claims that the Discos and not it was the weakest link in the country’s electricity value-chain.
ANED said the TCN still had the unholy character of defunct and hugely corrupt Power Holding Company of Nigeria (PHCN), adding that the company has not been able to guarantee its members mostly in the north stable power supply.
It explained that the Discos as alleged by TCN, could not be rejecting power or load-shedding their customers because the economics of their tariff was built on improved power distribution and consequent revenue collection.
It also noted that TCN’s plan to execute 22 transmission projects and improve their willing capacity to above 6000 megawatts (MW) within 2016 was doubtful given that the country was already within the fourth quarter of its financial year and no tangible fund has been given to the TCN for the projects by the government.
“It is unfortunate that the new management of TCN, with the departure of Manitoba Hydro, rather than reach out, in partnership, to work with the other stakeholders of the sector, is more interested in pointing fingers and playing the blame game.
“No matter how TCN wants to play it to color the reality of transmission shortcomings, transmission remains the weakest link in the power value chain,” said ANED.
It said: “To date, the maximum wheeling capacity reached by TCN has been 5,074.7MW versus its claims of increased capacity from 5,500MW to 6,000MW, wholly untested and unproven.
“Any plans by TCN to complete 22 critical projects captured in the 2016 budget has to be a function of the availability and release of the requisite funding required for same. Given that we are in the fourth quarter of 2016, it is not clear that TCN has received, nor will it receive, any funding that comes close to enabling it complete the indicated projects – a continued legacy of limited and poor funding of a vital aspect of power infrastructure.”
It explained that: “In view of the dire need of generation, as well as the generation thresholds in the Discos’ tariffs, which constitute the basis of their revenue recovery, it is inconceivable to think that any Disco would load-shed, thereby diminishing its revenue prospects and alienating its customers.
“Factually, a major contribution to the liquidity challenges that the Discos are currently experiencing is TCN’s infrastructure and technical limitations in wheeling power to the proper areas of a Disco’s geographical footprint.”
“Discos are currently experiencing a monthly loss in excess of N1 billion due to limited transmission capacities in various areas of the country, especially the northern part. Even worse, is TCN’s inability to meet its financial obligations, relative to this shortfall, thereby compromising the Discos’ ability to meet their obligations to the Market Operator,” it added.
ANED said it will welcome TCN’s operational improvement which it said can only happen with proper funding, upgrade of its project management capacity, and competent personnel.
It said the power privatisation was premised on turning around the operational profile of the TCN but that progress in that direction has remained quite minimal.