The Association of Power Generation Companies (APGC) on Monday said the declaration of willing buyer and willing seller (eligible customers) by Federal Government was a timely intervention to salvage the challenges in Nigeria Electricity Supply Industry.(NESI).
APGC, in a statement by its Executive Secretary, Dr Joy Ogaji in Abuja, said it became necessary to clear the air on eligible customer declaration because of recent reports and national discourse about the policy.
She said the clarification was necessitated by several media publications justifying why the declaration was ill-fated for the market and that it would lead to its eventual collapse.
“Part of the development following the declaration of eligible customer is the recent declaration of “ force majeure“ by the Distribution Companies (DISCOs).
“The declaration of the eligible customers pursuant to section 27 of the Electricity Power Sector Reform Act 2005 on May 19, 2017 and recently issued regulation by NERC to guide its implementation has been a trending news for the right and wrong reasons.
“The GENCOs whose product it is that is being jeopardized can no longer keep quiet while its hair is being shaved, hence this response.“
According to her, with stranded generation capacity in the electricity market and poor market liquidity, declaration of eligible customer is the brilliant way to liberate the electricity sector from its current monopoly.
`I believe if there should be any force majeure, the generation companies should declare force majeure for a failure by the electricity market in breaching the contract it had with the GENCOs.
“If there is any one sitting on a force majeure event, it is the legacy generating companies who are suffering from the lackluster performance of relevant agencies with accumulating debt and an “unrecognised deemed capacity.“
Ogaji said she was persuaded that the provision of enabling environment by relevant agencies for the implementation of eligible customers policy would deliver increased generation capacity to the GENCOs.
She also said the implementation would help address issues bothering on financial viability of electricity supply value chain as the main issue preventing Nigerians from enjoying benefits of the power sector reforms.
Ogaji said the declaration would also confer on consumers’, power to choose energy supplier and create a more efficient electricity market.
Other benefits inherent in the policy, according to Ogaji, include stimulating investment in the electricity sector since generators can sign long term contracts.
She said the declaration would send a powerful signal that electricity sector was evolving towards a full retail competition.
She said the implementation of the policy would ultimately allow a greater variety of suppliers to find innovative ways of discovering and providing what different groups of customers needed in economical ways.
This, she said, would promote national economic development by supplying electricity to the productive sectors of the economy and support economies of scale through bulk purchase of electricity.
According to her, it will help to reduce technical and non-technical losses for bulk high voltage supply and reduce financial risk by supplying credit worthy eligible consumers, among other benefits.
She said the policy would also ensure that operators focused more attention on customers, adding that value chain operators holding a monopoly in the sector had paid little attention to customer service.
“The presence of retailers, or the mere possibility of future competition will force existing distributors to establish appropriate customer services and commercial divisions.”