National News

FG To Stop Payment For Unused Electricity

March 17, 2022

The Federal Government will soon stop paying for unused electricity, the Nigerian Electricity Regulatory Commission (NERC) Chairman, Sanusi Garba, has said.

Garba told reporters in Abuja that issues surrounding the N1.6 trillion debt which electricity Generating Companies(GenCos) are demanding its payment, were technical.

Apparently accusing GenCos of lacking the capacity to deliver, he said that “it will be reckless to sign agreement for the generation plants for capacity that has not been delivered.”

He queried why “Nigeria will be paying for the capacity that has not been useful to Nigerians” when “the infrastructure” that ought to be provided by the firms “ is not there.”

NERC Vice-Chairman, Musiliu Oseni, also gave insight into the national grid collapse on Monday and Tuesday. Oseni blamed the development on a conductor snap on a 330 Kilovolts (kV) transmission line along the Benin, Edo State axis. The fault was however said to have been rectified yesterday.

Pointing out that some of the GenCos have no effective contract on payment of unused electricity, Garba said: “If a generation company has effective Power Purchase Agreement (PPA), that provides for payment of a certain level of capacity, then there is an obligation to pay.

“A number of generation companies however has no effective contract that guarantees the payment of the so-called unutilised capacity.

“The good thing is that we are gradually migrating to a point where the generation plants will have capacity payments being somewhere and somehow delivered along the value chain.”