Jennifer Adighije, the Managing Director and Chief Executive Officer of Niger Delta Power Holding Company (NDPHC), has claimed that the recent adjustment to the electricity tariff, particularly the cost-reflective tariff for Band A customers, saved Generation Companies (GENCOs) from financial collapse.
Adighije was a guest on Thursday’s Politics Today program on Channels Television.
“I want to express my sincere gratitude to the Honourable Minister of Power, Adebayo Adelabu, for taking the courageous step to pass this initiative that saved the GENCOs from ruin.”
We now have access to 30% of the invoice settlement that we issue, which has increased our liquidity. We were unable to fulfill our operational, OPEX, and CAPEX obligations prior to that, but now we can. We are surviving.
Only 10% of GENCO invoices presented to the Bulk Trader were settled before the Band A tariff reform, according to her explanation. However, with the introduction of the Band A structure, which only accounts for 15% of the market, liquidity in the sector increased by 70%, increasing from $1 trillion to $1.71 trillion.
“Our electricity hasn’t been cost-reflective over the years,” the statement continues. The DisCos are unable to remit their losses optimally, she observed, and there are also tariff shortfalls and then market shortfalls as a result of the complexity of the electricity market.
Read more: Nigeria Needs $10 billion annually to build a stable power supply.
She claims that the federal government is currently owed $600 billion, with $400 billion of that debt coming from the Bulk Electricity Trading Company.
It’s combined, I suppose. Because of the combination of our customers who are government customers and private customers who are also owing, bilateral customers, and eligible customers, You know, the government owes about $400 billion through the Bulk Electricity Trading Company, she said.
Nigerians “should Be Prepared to Pay”
The NDPHC managing director responded when asked what could contribute to a stable, 24/7 power supply for Nigerians by recommending either the government use smarter, more effective subsidies or a guaranteed, uninterrupted supply.
I’m going to say it in a very factual and dispassionate manner. In reality, electricity and power generation are not inexpensive. It therefore has two components. Nigerians should either be willing to pay the highest price for reliable, uninterrupted electricity, or the government should be willing to provide the best possible subsidies to enable the GENCOs to generate and transmit power to the last mile at the most affordable cost.
“Not necessarily because, for instance, smart meters can still be used to effectively and smartly to reduce waste.” You now have AI-enabled meters that, you know, can actually apply a consumption subsidy, making it even more accountable. So, she continued, “The government can still apply subsidies, and in a more cost-effective manner,” and electricity will then be delivered optimally.
Reforms don’t take place overnight.
Adighije defended the government’s performance and cited recent accomplishments made under President Bola Tinubu’s leadership when asked whether the current administration had kept its promise to double the country’s electricity generation capacity.
“We haven’t failed Nigerians, therefore.” You’re aware that transformational changes don’t occur overnight, don’t you? We’re consistently improving.
We’ve reached a peak generation of 6000 megawatts under this same administration. That is a historical milestone, to be sure. You can check out our 6000 megawatt peak generation on March 2 and see if we can sustain it.
She continued, claiming that the Tinubu administration has created the conditions for long-term stability in the electricity sector.
The President has very graciously laid the right foundations, including the right laws and regulations, in the most important way.
Source: Channels TV
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