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OPINION BY SIMON KOLAWOLE: The politics of electricity tariff | TheCable https://bit.ly/2Z1d0ek
. @simonkolawole: Whether we like it or not, the issue of electricity tariff is a touchy one. In the power sector reform, we are always talking about power generation, transmission and distribution. https://www.thecable.ng/the-politics-of-electricity-tariff/amp via @thecableng
We are always talking about how many megawatts we are producing or want to produce. We have also regularly discussed the cost of gas and the infrastructure to get it to the power plants. https://www.thecable.ng/the-politics-of-electricity-tariff/amp via @thecableng
We talk about the ability of the national grid to transport the power generated to the distribution points. We, as end users, always complain about estimated billing. But a critical element — the tariff — is the most ignored item on the agenda. https://www.thecable.ng/the-politics-of-electricity-tariff/amp
Yet, the sector cannot be economically viable as long as the tariffs we pay do not cover the cost of generating, transmitting and distributing power. That’s the tough truth. https://www.thecable.ng/the-politics-of-electricity-tariff/amp via @thecableng
. @simonkolawole: Today, GenCos can produce more than 10,000mw but TCN can only take 5,000mw or less. And we have to keep paying for power generated even when we can’t use it! https://www.thecable.ng/the-politics-of-electricity-tariff/amp via @thecableng
The Azura power that has become an albatross on our neck is a depressing case in point. We contracted to pay them $30 million every month when we knew @TCN_NIGERIA did not have the capacity to wheel the power produced.
We undertook to pay the 450mw-plant $1.2 billion if we pull out of the agreement. For the life of me, $1.2 billion will build a new, 1,000mw plant! Who did this to #Nigeria? Some people will have to answer for this someday. https://www.thecable.ng/the-politics-of-electricity-tariff/amp via @thecableng
Someday, investigations will be launched into the making of this Azura shackle and the key actors will, hopefully, be made to pay the price. https://www.thecable.ng/the-politics-of-electricity-tariff/amp via @thecableng
. @simonkolawole: I am told that Azura needed the guarantee to build the plant since we were the ones that desperately needed power, hence the millstone we have hung on our necks. This is a very condescending argument — as if Azura was doing Nigeria a favour.
When did capitalists start doing you a favour by investing in your country? I got this text from a friend last week: “I attended this training some years ago and the facilitator, a European, told us that Azura is the most expensive generation project he had ever seen.
He shared numerous models showing how the costs are determined. He said even in the Middle East where they have money, they didn’t spend close to what we are doing with Azura.” And we undertook to pay $1.2 billion if we exit. Nigeria!!!
https://www.thecable.ng/the-politics-of-electricity-tariff/amp via @thecableng
https://www.thecable.ng/the-politics-of-electricity-tariff/amp via @thecableng
In addition, we need to discuss the naughty issue of electricity tariff as I conclude my take on the politics of the power sector. I must say that I agree with the suspension of the increase in tariffs which was to take off on July 1.
I support it not because I think an increase was not necessary. There is no doubt that the federal government cannot continue to spend the kind of money it is spending to sustain the sector — over N1 trillion as “payment guarantee” in the last five years...
..for power that most Nigerians are basically not enjoying. If we had pumped the loan into education or health, we would not have seen a significant improvement.
However, the new tariff would have come at a bad time — when we are still battling the economic impact of the coronavirus disease. https://www.thecable.ng/the-politics-of-electricity-tariff/amp via @thecableng
@simonkolawole: Let us be clear, though: it is not as if Nigerians do not have a point when they resist tariff hike. A common retort is: why should I pay for darkness? https://www.thecable.ng/the-politics-of-electricity-tariff/amp via @thecableng
This is complicated by the failure to provide enough prepaid meters so that consumers can pay for only what they use. Post-paid metering, which allows for estimated billing, aka “crazy bill”, has created permanent tension and hostility between DisCos and customers.
The time has come to ask the critical question: when will the power industry be able to fend for itself? When the current PAG of N600 billion is finished, what next? https://www.thecable.ng/the-politics-of-electricity-tariff/amp via @thecableng
