Energy Central Professional

 

MicCom Chief endorses industry synergy to resolve tariff deficit


Business Day  

 

    The Chief Operating Officer of MicCom Cables, Olubukola Adubi has proposed a partnership between stakeholders to resolve the tariff deficit in the Nigeria's power sector.

    The Aggregate Technical, Commercial and Collection losses in the Nigerian power sector stood at 50.01 percent in the second quarter of 2021, about 30 percent higher than the expected industry average of 22.11 percent, the Nigerian Electricity Regulatory Commission (NERC) report stated.

    Speaking at the 2022 Nigeria Oil and Gas Conference and Exhibition, which was held in Abuja with the theme 'Funding the Nigerian Energy Mix for Sustainable Economic Growth,' Adubi said that metering requires significant state and Federal Government intervention, adding that the Distribution Companies (DisCos) need to increase capital investment into the distribution network infrastructure.

    Adubi said that to achieve the goals of the Presidential Power Initiative, there is a need for the decentralisation of distribution to effectively curtail DisCos monopoly as well as the exploration of sustainable green power alternatives to shield against global fossil fuel price hikes and gas production shortfalls.

    She added that allowing states to develop a localised regulatory framework, will improve efficiency and transparency, and ensure the complete removal of electricity from the exclusive list.

    Read also: Why generation is not the problem of the electric power sector

    'Other steps include ensuring stability in policymaking to incentivise investments and relaxing local content requirements to allow the entrance of substantial foreign expertise to increase private sector participation,' she said.

    In its quest to resolve the multi-layered problems in the power sector, Nigeria is exploring a legal and fiscal framework that can work, the statement read.

    According to Adubi, the proposed Electricity Bill, currently before the National Assembly, will have an impact on the dilution of the Minister's powers in sector oversight, and retention of exclusive franchise areas for DisCos.

    However, Adubi commended current steps being taken to close the metering gap such as intervention from states; Central Bank of Nigeria (CBN) intervention; provision of partial risk guarantees to IPPs; capping of estimated billing to control tariff deficits; and franchising of metering, billing and collection process by DisCos.

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