Opinion: Shocking Fact – Why Nigeria’s Power Sector Privatization is not Succeeding

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Opinion: Shocking Fact - Why Nigeria's Power Sector Privatization is not Succeeding
Despite the fact that privatisation was necessary, the wicked 1999 Constitution actually planned its failure by bringing up agencies, controls and over Lordship that must kill it.
So the federal government Electricity Power Sector Reform Act in 2005 (EPSRA 2005) which led to the creation of PHCN, NERC, NBET, NESI, and the unbundling of NEPA into 6 generation and 11 distribution companies. By 2013, NEPA had been privatised. The government did not privatise the Transmission Company of Nigeria (TCN); they held on to it. For easy understanding, TCN is the platform through which the GENCOs and DISCOs relate. The NERC controls them all.
Was the privatisation necessary? Yes! Government has no business in business. And no more salaries overhead.
Was the privatisation successful? Hell, no! Better than the days of NEPA in government finances but zero impact on the consumers. We still don’t have electric power.
Problems with the privatization
1. It was incomplete.
The government still runs the TCN thus effectively runs the Generation and Distribution companies
2. The TCN network is old, cumbersome, inadequate and the single grid philosophy is obsolete
3. Negligible investments in the expansion of the transmission network thus making it impossible for the generation companies to inject more power.
As if that weren’t enough problems, the NERC determines the cost paid by consumers. This cost is effectively less than the economic cost of power supply. The philosophy of “one size fits all” using MYTO (Multi Year Tariff Order) to determine tariffs that are reviewed every 5 years leaves the operators in tears. The affluent customers in Asokoro and Victoria Island pay the same rates as the poor in Hadejia and Ogoja.
Dear Friends, the power operators receive less than they give out in monetary terms. So they depend on government grants and loans!
But that ain’t the worst.
Do you know that the electricity bills you pay are not controlled by your provider? Lol. This is how it works:
All bills you pay go to an account controlled by NBET (Nigerian Bulk Electricity Trader). Here, all funds are pooled. At the end of the month, NBET calls a reconciliation meeting where they determine how much electricity GENCOs supplied, how much electricity your provider sold (DISCOs), how much gas supplied by GACN, and so on. Then pay everyone. It doesn’t matter if you felt shortchanged; what the government pays the private power company is what it gets. And to hell with your complaints! Or your license be yanked off!
It might seem surprising to you but the government doesn’t allow the power plants that depend on gas to purchase directly from the gas companies; gas must be purchased from a government agency called GACN (Gas Aggregation Company of Nigeria) at the government price. And NBET (another government scoundrel) pays on behalf of the GENCO and deducts the money from their funds.  Now, 81% of the power plants in Nigeria depend on gas! Effectively, the federal government is controlling the finances and lives of the privatised electricity companies.
Oh! The 3000mW that reaches the Load Centers is not all consumed; DISCOs reject loads with pleasure. Yet, the power supply is insufficient! Load is rejected mainly due to inadequate Injection Substation sizing and energy theft. If there were Municipal Power Utility Companies, no load would be rejected. The importance of the Municipal Government in power supply is just too great to be ignored. We do not have municipal governments in Nigeria!
Dear, Readers, despite the fact that privatisation was necessary, the wicked 1999 Constitution actually planned its failure by bringing up agencies, controls and over Lordship that must kill it. The government simply transferred the problems to the investors, and retained the opportunities and profits.
There shall be no light as long as this Constitution subsists! This Constitution is a major impediment to power supply! And that’s the Constitution that a president you elect swears to guard with his life to protect to deny us of electricity? Pure insanity!
We must throw out that Constitution! A man that has vowed to guard it with his life wouldn’t want it thrown out…changing that Constitution or a commitment to changing it before electing that man, is just common sense!
We must #restructureOrBurst…or perish in darkness!
by Baron Roy
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