FG Denies Plans To Stop Payment Of Shortfalls To GENCOS
Following a report in a national daily newspaper, the Ministry of Power, Works and Housing Wednesday denied that the Federal Government has stopped the payment of shortfalls to Electricity Generation Companies (GenCos), describing the report as both false and unfounded.
The report, contained in the Wednesday edition of Punch Online media, held that the Federal Government on Tuesday ordered power generation companies to find customers and sell their power directly to the identified customers as, according to the report, “plans are on the way for it to ultimately exit the monthly payments to Gencos to help cushion the revenue shortfalls on the books of the power generators as a result of the poor remittances from the power distributors”.
The report titled, “FG to stop payment of shortfalls to Gencos” and attributed to the Permanent Secretary (Power) in the Ministry, Engr. Louis Edozien, emanated from the remarks of the Permanent Secretary at a Workshop organized by the Nigerian Electricity Regulatory Commission (NERC) on Tuesday, 12th February, 2019 on the Eligible Customer Regulation.
But in a Statement signed by the Permanent Secretary in person, the Ministry asserted that at no point in his remarks did the Permanent Secretary state that "FGN is to stop payment of shortfalls to Gencos", pointing out that the Payment Assurance Programme of the Federal Government that authorized the Nigerian Bulk Electricity Trader (NBET) to guarantee payment for any power it has contracted from generation companies on the national grid had not been reversed.
The Statement read in part, “The Payment Assurance Programme of the Federal Government of Nigeria that authorized NBET to borrow N701.9 billion to guarantee payment for any power it has contracted from generation companies on the national grid and their gas and other suppliers has been in operation since January 2017. The amount NBET is authorized to borrow is not yet fully drawn. The Federal Executive Council (FEC) approved the programme. FEC has not taken any decision to stop it. FEC is the appropriate authority to comment on the Programme’s tenure and borrowing ceiling”.
In order to set the records straight, the Statement clarified that at the workshop organized by NERC on the Eligible Customer Regulation, the Permanent Secretary urged generation companies to more aggressively take advantage of the regulation to sell the power they can generate, of which 2,000MW is now stranded, to Eligible Customers who need it and are willing and able to pay for it.
Insisting that it would be better than waiting for NBET to pay for it or to guarantee it, for which NBET needs support from the Federal Government due to shortfalls in payment by distribution companies, the Permanent Secretary decried that though the Minister issued the policy direction to NERC that gave rise to the regulation in May 2017, and NERC has issued the regulation, none of the interested consumers and their generation company suppliers have been given licenses to buy and sell power as Eligible Customers. He encouraged NERC to accelerate and simplify the licensing process.
He further stated that the Transmission Company of Nigeria (TCN) should continue to support the regulation by making targeted investments in the national grid, as needed to service specific contracts with generation companies and Eligible Customers to transmit the power, with penalties for failure to transmit, adding that TCN could finance such targeted investments with the expected revenue from such bilateral transmission contracts.
Encouraging electricity distribution companies (DisCos) to embrace the policy, the Permanent Secretary argued that if the DisCos were satisfying the power supply needs of their consumers of bulk power adequately such consumers would have no reason to generate the power by themselves or to want to become Eligible Customers adding that by embracing the regulation, the DisCos could partner with investors and generation companies to build new distribution infrastructure to better serve specific paying customers.
“They can buy power directly from generation companies and contract with TCN to deliver it, and give premium service to selected customers or customer groups”, the Permanent Secretary said adding that in such cases the distribution company must be willing and able to guarantee the payment for the power they buy, “because the shortfalls in payment which characterizes their power purchases from NBET, would not be possible in such bilateral contracts”.
The Permanent Secretary then enjoined dissatisfied consumers to take advantage of the Customer Care platforms set up by all the distribution companies in compliance with the provisions of their license, and escalate unresolved complaints to the NERC Consumer f Forum offices, as provided for in regulations, emphasizing that dissatisfied consumers could take advantage of the Mini-Grid Regulation, NERC's up-coming Franchising Regulation and the Eligible Customer Regulation to get premium power that meets their needs.
The Workshop revealed that the Ministry has received forty four (44) expressions of interest with a total demand for 600MW from underserved and unserved consumers desirous of becoming Eligible Customers. Of these, 14 have submitted license applications to NERC, two have fulfilled all NERC's conditions and expect to be licensed imminently.
The Ministry enjoins the public to discountenance the false report, and requests that the news outlets purveying such fake news cease and desist.
APC CONVENTION SATURDAY, 6TH OCTORBER, 2018
This is to inform FCT Residents, Visitors and Motorists that due to the National Convention of the All Progressives Congress, APC slated for Saturday, 6th October 2018 at the Eagle Square, Abuja, an unusual influx of human and vehicular traffic will be experienced within the city with the attendant traffic congestion in and around the venue of the convention.
To this effect all vehicular movement through Shehu Shagari Way from the early hours of Saturday, 6th October, 2018 to Sunday, 7th October will be diverted at Ralph Sodeinde Street by Bullet Building to link Central Business District. Motorists will also be diverted at Kur Mohammed Street and Constitution Avenue at Bayelsa House to Central Business District.
Traffic on Ahmadu Bello Way will equally be diverted at Ralph Sodeinde Street by Finance Junction to Central Business District. Motorists will also be diverted at Kur Mohammed Street or Constitution Avenue by Benue Building to link Central Business District.
The Federal Capital Territory Administration have mobilized Officers of the Police, FRSC, FCT Directorate of Road Traffic Service and other relevant Traffic Enforcement Agencies to various flash points to ensure seamless traffic flow.
Parking has been made available at the National Stadium for ALL Delegates coming from outside Abuja from where they will be conveyed to the venue by dedicated Buses.
In the same vein, ALL Delegates from within the FCT should converge at the Old Parade Ground from where they will be conveyed to the venue.
Please note that parking around the Eagle Square and its environs will not be tolerated as offending vehicles will be removed.
The understanding of the public is hereby solicited
Secretary, Transportation Secretariat
Federal Capital Territory
FG To Erring Contractors, Up Your Games Or Face Sanctions
The Zonal Director of the National Housing Programme in the North- West, Federal Ministry of Power, Works and Housing, Architect Joseph Toluhi, has urged erring contractors handling the on going construction of housing project in Kebbi State to step up their games or face necessary sanctions.
He noted that contractors, who fails to perform diligently on the job will have to give way for others to be engaged, adding that relevant clauses in the contract agreement can be invoke for appropriate sanctions.
This was contained in a statement by the Zonal Director on Wednesday in Biriin Kebbi during the North-West inspection tour to the project site.
Toluhi stated that the federal government is committed to provide decent and affordable housing to its teeming population and reduce the housing deficit in the country, adding that the NHP project is designed for the medium income earners who have the affordable means to acquire these houses across the nation.
The National Housing Programme, Kebbi State consist of 76 housing units of 1bedroom, 2 bedrooms and 3 bedrooms semi-detached bungalows, are being handled by 19 indigenous contractors.
In a similar development, the zonal inspection team led by Toluhi also visited the National Housing Programme site in Sokoto State to have on-the-spot assessment of the on going construction works which has reached 95 per cent completion stage.
“I must say that I am pleased and happy with the level of progress of work on this site because we have a very high level of competition. Most of the building here have been completed”. He noted that out of 20 contractors engaged, 12 of them have already been completed while four are yet to be roofed.
According to him, “this means, we are ready to move into these buildings. The infrastructure such as water supply, road arterial and water supply have reached a very high level of completion”.
The Team Leader in Sokoto State, Mr lliya Kastuda also confirmed that construction work has reached 95 percent completion, adding that there is provision of worship centers, school, market to give necessary comfort and police post to ensure adequate security within the housing estate.
The zonal Director and other officials of the Ministry inspected a similar project in Gusau, Zamfara State, which is put at 65% completion stage. He however expressed disappointment in the poor quality of job done, stressing that government will not tolerate sub-standard jobs from any contractor.
Keynote Speech Of The Honourable Minister Of Power, Works And Housing At The Guardian Power Summit
Keynote Speech At The Guardian Power Summit: "Beyond Rhetoric: Turning Nigeria's Power Sector Value Chain Potentials To Profit" Delivered By Babatunde Raji Fashola, San At Four Points, Lagos On Thursday 14th September 2017
I would like to start by thanking Lady Maiden Alex-Ibru, the chairman and publisher of the Guardian newspaper for inviting me to speak at this forum.
In particular, I have been invited as keynote speaker with the task of "setting the context" around the theme of turning Nigeria's power sector value chain potential to profit.
I welcome the opportunity this platform provides because it provides the Buhari led government a forum of expression to well-meaning and right-thinking persons who want to know what is going on about power.
As my invitation rightly acknowledges, context is important. It provides a rational basis for assessment and a fair determination for deciding whether progress is being made.
So, let us start by going back to May 29, 2015 when this government was inaugurated.
The amount of power available on the grid on that day was 2690 MW. The transmission capacity was around 5000 MW and was then infamously described as the weakest link.
The distribution capacity existing at around 750 33/KV trading points, from where power is received by the DisCos and sent to us, was about 4000 MW.
Clearly, the power then being generated at 2690 MW was not up to the transmission capacity of 5000 MW and was insufficient to fully optimize the distribution capacity of 4000 MW.
Within a few months after President Buhari’s assumption of office, power improved and we all acknowledged. We credited it to the President's ‘body language.’
But the truth was that it had little to do with body language, and more to do with a sense of purpose that people sat up and began to do what ought to be done.
In addition, the rains were upon us in July 2015 to September 2015.
There was Gas supply which allowed the Thermal plants to produce power.
Therefore from Hydro and Thermal sources we reached an all time peak power production of 5,074MW before the damage to the pipelines started and we started losing power.
We cannot damage power and gas assets and still expect them to provide service to us.
It does not make sense.
Instead of rhetoric, this government set to work.
a. Government engaged the aggrieved communities where the attacks were taking place to restore peace.
b. Government repaired the damaged gas pipelines and gradually restored gas supply.
c. Government launched an economic recovery and growth plan which made power supply one of 5 (FIVE) critical pillars.
d. Government launched a Power Sector Recovery Programme to work out and implement policies and actions such as:
i. Constituting the regulatory commission, the Nigerian Electricity Regulatory Commission (NERC); except the Chairman, now awaiting the confirmation of Senate and the Rural Electrification Agency (REA) to Champion solar power development and rural electricity deployment and access.
ii. Payment of debts to specific DisCos, and verification of debts to all others.
iii. Payment assurance guarantee scheme of N701 Billion to give confidence to GenCos, gas suppliers and their financiers that we mean business.
iv. Declaration of eligible customers, to encourage people to invest in building and expanding distribution assets.
v. Development of mini grid regulations to encourage individuals and communities to build their own mini power generation and distribution facilities.
vi. Awarding contracts to complete and expand transmission facilities and building new ones across the country.
Ladies and gentlemen, all of these policies and action go beyond rhetoric.
They are well thought out decisions, consistent with law and informed by a thorough diagnosis of the problems in the sector that have produced a clear set of solutions to deliver incremental power.
The result is that as at 4 September 2017 the available power that can be put on the grid was 6619 MW (the incremental power we sought to achieve from 2069 MW in 2015); the transmission capacity was simulated at 6,700 MW (up from 5,000 MW in 2015) but the distribution capacity was 4,600 MW which was what was put on the grid.
On September 12, 2017, production of power reached an all time level of 7,001 MW.
Clearly this is evidence-based progress, because we now produce more power then we can distribute. This does not mean that we have enough yet. It means that policies are working, but all the problems are not resolved.
We must continue the Power Sector Recovery Programme to impact the distribution end of the value chain so that we distribute and sell everything that we produce as an incentive to more power production and supply.
The recent GDP growth results by NBS, announcing Nigeria's exit from recession, and its detailed sector analysis, shows and I quote:
"Electricity production as well as financial services and construction also grew strongly..."
It went further to provide details by stating that:
"Other sectors the did very well in the second quarter 2017 include electricity and gas and financial institutions, with electricity and gas growing by 35.5%."
I acknowledge that there will be cynics who will say, it was because of the rains. True enough, the rains contributed to the Hydro power increase, but the total Hydro capacity available with the rains from Jebba, Kainji and Shiroro as of 4th of September 2017 was about 1,000 MW, so it is the gas thermal plants, arising from peace efforts and pipeline repairs that made up the difference that made the total available power of 6619 MW that was produced.
Therefore, beyond rhetoric, our next step is to solve the distribution problem.
This involves the sustained implementation of the Power Sector Recovery Programme.
Before I speak to the programme, let me say that although the power sector has been substantially privatized, and therefore it is the private sector that we must look to lead us through this. The sector is a regulated sector, governed by law, the Electric Power Sector Reform Act of 2005, and the regulations made by NERC (the Nigerian Electricity Regulatory Commission) which makes rules and regulations that govern the conduct of all participants in the value chain of power including TCN, the government owned company.
It is these rules and regulations that ensure confidence and predictability in the sector.
Therefore, one of the decisions under the Power Sector Recovery Programme is the enhancement of governance, like the constitution of NERC (that I have referred to), who have issued regulations to guide the development and deployment of mini grids of 100 KW -1 MW which will help distribution as they come on stream.
Another decision is to strengthen the governance of DisCos by reconstituting our board representation in all the discos, a process that is also underway.
Next is the implementation of eligible customers, which is awaiting the finalization of regulations by NERC based on consultations with stakeholders.
The successful implementation of this policy will help heavy power consumers, who are denied power because of defective distribution, to make the investment by building the distribution equipment under arrangements and agreements with the DisCos.
We are also looking at licensing some private power plants who have generation licenses and excess power, but no distribution license, to grant them permits to willing buyers especially in industrial clusters under regulations made by NERC.
Ladies and gentlemen, the Power Sector Recovery Programme also involves producing more power, like:
a. Completing the first phase of 9 (NINE) federal universities out of a planned 37 (THIRTY-SEVEN);
b. The completion of the 240 MW Afam power plant; the 10 MW Kasina wind farm, the 29 MW Dadin Kowa Hydro plant, 30 MW Gurara Hydro plant, the 40 MW Kashimbilla Hydro power plant, the Kaduna 215 MW plant, the Zungeru 700 MW Hydro plant and the Mambilla 3050 MW Hydro plant which was just approved for award;
c. Completing several transmission projects across the country; and
d. Implementing the meter supply and installation plan through licensing of service providers, franchise holders, rural communities meters to be implemented on the regulations by NERC this year.
My time constraints prevents me from going further into detail.
However, I believe that the much I have said reveals that this Government has undertaken a clear diagnosis of the problems, clearly understands them, has evolved solutions to address them, and some of them are already bearing fruit.
Successes so far recorded in power generation and transmission have revealed that the work is far from finished, but the capacity that achieved the success in generation and transmission can demonstrably be transferred to solve the distribution problems.
Finally, I believe that well-meaning and right-thinking Nigerians will agree, that the Buhari Government has gone way beyond rhetoric.
We have evolved solutions that are already contributing to GDP growth, and the promise to do more, unlock the power value chain potential for enterprise and profit clearly lies ahead of us, with the successful implementation of the Power Sector Recovery Programme.
Thank you for listening.
Babatunde Raji Fashola, SAN
Honourable Minister for Power, Works and Housing
Thursday 14th September 2017
COMMISSIONED 60KW GRID CONNECTED HYBRID SOLAR PV MINI GRID POWER PROJECT IN TORANKAWA VILLAGE YABO LGA SOKOTO STATE
The recently commissioned 60KW Grid Connected Hybrid Solar PV Mini Grid Power project in Torankawa village Yabo LGA Sokoto State Initiated by the Ministry of Power Works and Housing Power Sector under the Renewable Energy Micro Utility REMU Programme which was commissioned on Tuesday 12th February 2019
FASHOLA ADDRESSES THE PRESS ON THE NATIONAL PUBLIC BUILDINGS MAINTENANCE POLICY RECENTLY APPROVED BY THE FEDERAL EXECUTIVE COUNCIL IN ABUJA
Hon Minister of Power Works Housing Mr Babatunde Fashola SAN 2nd left Permanent Secretary Works Housing Mr Mohammed Bukar 2nd right Chairman Committee on Housing House of Representatives Hon Mahmud Mohammed right Deputy Chairman Committee on Works Hon Dr Abubakar Kannike left shortly after the Hon Minister s Press Briefing on the National Public Building Maintenance Policy recently approved by the Federal Executive Council at the Ministry of Power Works Housing Headquarters Mabushi Abuja on Thursday 31st January 2019