Federal Government has ordered a high-powered investigation into the circumstances regarding the extension of the operational licence of distribution companies whose performances are considered abysmally poor.
Minister of Power, Adebayo Adelabu who announced the probe, yesterday, wondered why their operational licences should be extended for five years in the event of poor performance. He wanted to know who approved the extension and for what purpose.
Adelabu queried the legality of the extension and the contractual correctness of it.
However, he assured that irrespective of the extension, a licence would be revoked adding that the government intends to have a new performance bond.
To this effect, Adelabu announced the suspension of the cost reflective tariff for now for political expediency.
“I don’t think it’s something we must do now. If we increase the tariff now, are we sure of regular supply of electricity?
Nigeria generates over 90,000 megawatts and over 40,000 megawatts are from generators. It is not time for cost reflective tariff The president asked them to increase the electricity supply before they increase tariff” he said.
The Minister gave the indication of reviewing the territorial areas of the DisCos, giving Ibadan DisCo as having over seven states which they cannot manage.
On the privatisation of the electricity sector, Adelabu assured that it would be looked into.
“I don’t believe that privatisation is the way to go. We may not be able to reverse it because contracts have been signed, commitments have been made and loans have been taken. You don’t privatise structures. Commercialisation still remains the best” he said.
On the frequent collapse of the national grid, the minister said that the government would de-emphasise on the national grid for now.
“We can still generate power and pass it down to distribution using micro and mini-grids” he said.
Recall that the DisCos were initially given a 10-year licence but upon privatisation, the Nigerian Electricity Regulatory Commission (NERC) extended their licence by five years. So the DisCos have a 15-year licence. So, their licence will expire five years from now which is 2028.