‘Lopsided electricity distribution hampers economy growth’

The lopsided electricity distribution arrangement that favours the supply of about 70 percent power to residential customers against the 30 percent to industrial/ commercial customers is hampering the economic development of Nigeria. Industry operators have warned.

They observed that this arrangement is very unusual especially if Nigeria hopes to accomplish her industrialisation agenda in the nearest future.

John Donnachie, managing director, Ibadan Electricity Distribution Company (IBEDC) observes that normally for any economy to thrive industrials and commercials areas get a lot more power to be able to impact positively to the economy.

He however is worried that the same cannot be said of Nigeria as most of the Distribution companies are inadvertently tint towards supplying power to the residential class to cushion huge economic cost.

Donnachie was quoted to have said in an interview with BusinessDay that in most countries, in order to develop the economy, industrial plants get a lower price and they take the bulk of the energy to create businesses and the right environment for job creation and development.

He disclosed that in term of revenue, it is 30 percent commercial, it is about 70 percent residential and that relates to the high tariff today to the commercial.

Industry close watchers are of the opinion that to solve this huge economy challenge, regulators of the power sector have a key role to play in reigniting investors’ confidence in this industry.

Ayodele Oni, an analyst that specialises in international energy the newly sworn commissioners of the Nigerian Electricity Regulatory Commission (“NERC”) need to think about regulations that open the market and make doing business attractive.

Oni said NERC should consider what type of regulations that should be driven to reassure confidence in investors, and regulations that would make the Nigerian energy mix more robust.  The power sector requires financing and these commissioners should tap into making it more investor and investment friendly.

According to him, “NERC may be required to implement its regulatory powers in a more robust manner when dealing with the Discos”.

“Discos should be more transparent and the regulators should demand such transparency. If there are claims that the Discos receive revenues and refuse to remit same to NBET, regulators should do more than lip-service to resolve this. The Discos should be held accountable to how much they receive rather than seek for some interventions from the market”. He said.

He urged the regulators to explore improvements to regulations for eligibility customers in a way that reduces the fear revenue losses by Discos.

KELECHI EWUZIE