Posted by 9jabook.com on August 10, 2009 at 1:59am
•Uduaghan steps in over repairs of Escravos-Lagos gas pipeline there is a lot of talk but the bottom line is that nothing works at all .
Nigerians will pay more for electricity with effect from this month following a 10 per cent increase in tariffs, according to Federal Government’s plan to encourage private sector participation in the power sector.
But according to the Administrator of Nigerian Electricity Regulatory Commission (NERC), Alhaji Imumudeen Talba, consumers will not pay the new tariff which he said would be borne by the Federal Government through subsidy.
However, this claim is not consistent with findings by THISDAY which revealed that consumers will indeed pay 10 per cent of the new tariff while the Federal Government will pay 90 per cent of it.
Meanwhile, hopes of improved power supply have been rekindled by Governor Emmanuel Uduaghan of Delta State who has succeeded in resolving the impasse over the repair of the major pipeline that supplies gas to the nation’s power plants.
The contractor handling the damaged Escravos-Lagos pipeline is expected to return to site today, fuelling optimism that the Egbin power plant in Lagos, which has the capacity to generate close to 2000 megawatts but has been generating a little above 200 megawatts because of gas shortage, would soon bounce back.
Under the new pricing structure, the tariff for the least paying urban-dwelling consumer is now N4.40, up from the previous N4.00 per kilowatt per hour.
The next category who usually paid N6.00 per kilowatt per hour are expected to go up to N6.60 while the tariff for the highest paying category went up from N8.50 to N9.35 per kilowatt per hour.
Talba told journalists that it was part of the agreed periodic adjustments embedded in the Multi-year Tariff Order (MYTO), which government has already subsided and the support would subsist till 2011.
By then, consumers will bear all the tariffs as Federal Government is expected to gradually disengage from paying subsidy, by which time power supply is expected to have become steady.
Talba explained that the rise was as a result of the inflation and changes in the exchange rate of the national currency against the dollar.
“What we are saying is that there is MYTO. We reviewed that in view of the inflation. You see, there is inflation…Then in view of the inflation, in view of the exchange rate - you know, last year when we did it, the exchange rate of the naira to a dollar was N170 and this year it is N147, and then there is inflation,” Talba said.
According to him, “It is just a minor review, which is part of the multi-year order. It has already been provided, but it does not affect what customers are paying. It does not affect them.”
Rather, he said it was an issue that would be settled among the generation companies, the gas companies and the distribution companies.
“It is not something that will affect the consumers, especially the poor Nigerians, because government has already provided subsidy for that,” Talba stated. “So whatever review we do, it’s been taken care of by the subsidy given by the government. So it will not affect the consumers.”
The NERC boss spoke after a dinner his organisation hosted in honour of the visiting delegation from the National Association of Regulatory Utility Commissioners (NARUC), Michigan Public Service Commission and United States Agency for International Development (USAID).
The third in the series, it was part of the two-year old Energy Regulatory Partnership programme with NERC for which an MoU was signed in 2007.
Talba disclosed that the release of the subsidy to the power distribution companies was for the months of January, February and March.
“What we know is that for the months of January, February, March, we made a recommendation to the government and the Minister has given approval for the release of the subsidy to the beneficiaries. What I mean by the beneficiaries are the distribution companies. I know that has been done and release has been made to the market operator,” he said.
The market operator is Power Holding Company of Nigeria (PHCN) which operates through its 11 distribution companies, six generation companies and one transmission company.
“And we’re now looking at the April subsidy because we ought to be satisfied that the money given to them has been utilised for the purpose for which they were given before we recommend again,” the Head of the Nigerian regulatory agency said. “So we are waiting to hear from the market operator and be sure that the money released earlier has been properly utilised.”
On why NERC had not made its findings known months after it said it would announce them after it had completed a visit to all the IPPs (independent power producers) granted licences to see if they had lived up to expectation in terms of meeting the milestones, Talba said: “I promised you and we are still on it.”
According to him, “What happened was this. At out last meeting with the IPPs, they made us understand that we have not released the market rules and we promised them that we would release the market rules by the end of May. We have done that.
“The president has approved the market rules and it has been released to them; we have done the standard PPA. It has been sent to the ministry; we have given them. All these are now on our website.
“They wanted to have these first before they proceed with other things, but we should give them the room and watch them. So having given them these, let’s wait and see what they can do. If they cannot perform, if they cannot do anything we take the further step.”
Talba said during the week-long meeting with the visitors from the U.S., they exchanged ideas about regulatory issues, frameworks, legal issues and pricing, as well as how to run and monitor issues about electricity companies.
Michigan, agencies which he said had been regulating for more than 100 years, are consumer complaints, case procedures and enforcement of guidelines.
“We learnt a lot of things we’d not been doing before,” he said. “We’re going to improve on what we are doing, particularly on consumer issues, and enforcement of guidelines, monitoring the activities of the electricity companies, especially the distribution companies. Safety issues are of much concern to us, taking into cognisance the recent frequent electrocution cases… So we’ve learnt from them.”
The partnership programme was financed by USAID and NARUC.
Uduaghan, at the weekend, successfully resolved the impasse over the repair of the major pipeline that supplies gas to the nation’s power plant.
Uduaghan said the repairs of the pipeline, which conveys gas to Lagos, would help in meeting the target of 6000 megawatts by December 2009.
Speaking at a stakeholders meeting in Warri, Delta State, with Gbaramatu elders, chiefs, officers of the Joint Task Force (JTF), the chairman of Warri South West LGA, Mr. George Ekpemuokpolo and staff of oil companies, the governor harped on the need for a conducive environment to enable repairs to be effected by the contractor, De Wayle’s International limited.
Uduaghan, who stated that oil giants, Shell and Chevron, had already embarked on the repair of their damaged pipelines, assured the contractor that adequate security would be provided by the JTF.
He said that government was aware that power was a critical issue and the worsening situation was leading to a shortfall in gas production, occasioned by vandalism of pipelines in the aftermath of the May 13, 2009 military bombardment of Gbaramatu.
The representative of the NNPC, Mr. Voke Mukoro, disclosed that the nation was losing 180 million cubic feet of gas daily as a result of the damage to the Escravos-Lagos pipeline.
Efforts aimed at generating 6000 megawatts of electricity that will translate into nationwide steady power supply has received a boost with a gas processing plant soon to be established at Utorogun, Delta State.
Already, the Delta State government has given land to the contractors, South Field Gas and Power Limited, which is expected to complete the project in 15 months.
The Managing Director of South Filed Gas and Power Limited, Dr. Patrick Ndiomu, who briefed Uduaghan when the chairman, Senator Musa Adede, led a team of the company’s management to the Governor’s Office Annex, Warri, said the completion of the gas processing plant would provide gas to power stations across the country.
Ndiomu further said with the abundant gas reserve in Nigeria, the Utorogu Gas Processing Plant alongside the Oben Gas Processing Plant that was ongoing in Edo State, would account for 80 per cent of gas supply to power stations in the country.
He also stated that the gas processing plant was part of the national gas master plan and was intended to improve electricity generation.
In his remarks, Uduaghan thanked President Umaru Musa Yar’Adua for approving the establishment of the gas processing plant in Delta.
“The Utorogu Community is excited and waiting for the commencement of the project,” he said.
The governor noted that the gas processing plant would eliminate condensate which some “unpatriotic persons used in adulterating kerosene as well as reduce the incidence of pipeline vandalisation”.
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