Financial Energy Review
……Ben Ndubuwa…..
The Nigerian Electricity Regulatory Commission (NERC) has announced plans for a policy shift that would make electricity distribution companies (Discos) bear the cost of repairing faulty transformers and other damaged infrastructure. This change, aimed at improving the management of the country’s electricity assets, was revealed at a public hearing organized by NERC on Thursday to address Nigeria’s recurring grid collapses.
The hearing featured insights from NERC Chairman Sanusi Garba and Joy Ogaji, Chief Executive Officer of the Association of Power Generation Companies (APGC). During the session, Ogaji disclosed alarming statistics, noting that Nigeria has experienced 162 grid collapses since 2013, a problem that has stifled consistent power supply and impacted economic productivity.
Garba acknowledged the substantial challenges posed by the ongoing collapses, pointing out that these issues not only affect power availability to customers but also undermine the financial viability of both generation and distribution companies. He stressed that immediate and effective action is essential, as the frequent collapses have significant implications for residential and commercial power users.
“Just one faulty piece of equipment can lead to a nationwide blackout,” Garba remarked. He questioned the adequacy of protection systems, citing recent transformer fires that he likened to “a bale of cotton catching fire.” Garba called for enhanced measures to safeguard infrastructure, adding that the sector’s inefficiencies prevent it from delivering the quality of supply critical to Nigeria’s industrial growth.
Ogaji, representing the APGC, emphasized the need for NERC to take a proactive approach. “This issue isn’t new,” she said, highlighting the 162 recorded collapses. Ogaji further noted discrepancies in data reporting within the sector, urging for greater transparency and data integrity.
Meanwhile, the Transmission Company of Nigeria (TCN) reported a new security challenge. Following a recent vandalism incident on the Shiroro-Mando transmission line, the Office of the National Security Adviser issued an advisory recommending limited TCN operations in affected areas. Additionally, vandalization of the Ugwuaji-Apir 330-kilovolt transmission line has led to days-long blackouts in parts of northern Nigeria.
With this backdrop, NERC’s proposed policy shift may help drive accountability within Discos, while efforts to stabilize the national grid remain paramount.
