FG moves to recover debts from power firms

The Federal Government may recoup its money from debtor power distribution companies by calling on their bank guarantees. This, it was gathered, had been brought before Vice President Yemi Osinbajo, who is the Chairman of the National Council on Privatisation.

Mid last month, the Federal Government ordered the power distribution firms to remit the outstanding amounts for capacity and energy invoiced against them since February before the close of business on July 24, 2015. But two weeks after the expiration of the ultimatum, the affected power distribution companies have yet to comply with the directive.

Impeccable sources at the Federal Ministry of Power and the Nigerian Bulk Electricity Trading Company Plc told our correspondent on Thursday in Abuja that the Federal Government had through the NBET written to the Discos and their various banks notifying them of the intention to call on their respective bank guarantees.

A top management official of the NBET said the decision had not been implemented because the vice president recently held a meeting with operators in the sector and the issue was discussed. The official, who spoke on the condition of anonymity due to the sensitive nature of the subject, said, “We have written to the Discos and we have notified the banks that we intend to call on the guarantees. But how much of the guarantees should we call on is something that we are evaluating. 

But I can tell you that there have been some meetings at the highest level of government, where the Discos are consulting with the vice president, the Permanent Secretary of the Federal Ministry of Power and the Chairman of NERC.

“We also attended that meeting. And due to that intervention, we have to see how the outcome of that meeting goes. So, that’s really why we have to wait. The Chairman of the NCP is the vice president and he is serious about this issue. We have brought out this issue of poor remittances as one of the cases before him. So, we have to wait for the conclusion of that meeting to know what next to do.”

Another source at the Power ministry told our correspondent that when the Transitional Electricity Market was declared, the expectation was that all the Discos would make 100 per cent remittance to the government.

The Managing Director, NBET, Mr. Rumundaka Wonodi, explained to our correspondent that it was important for the Discos to remit funds to the government now that power generation was gradually improving. He said their failure to make stipulated remittances might result in a fall in power generation and that the government might not have enough funds to pay for generated electricity

“Generation is coming up and we need to be sure that money is being transferred from the distribution to the generation companies to incentivise generation. The gas suppliers are ramping up gas to the power industry; if the money does not get to the generation companies and they do not pay their suppliers, we may see supply falling,” Wonodi added.

Meanwhile, the Transmission Company of Nigeria has announced the attainment of an all-time maximum energy of 101,088 megawatt-hour wheeled through the national grid in a day. The TCN said in a statement signed by its General Manager, Public Affairs, Mrs. Seun Olagunju, that the feat was recorded on Wednesday, August 5, 2015.The company’s previous highest wheeled energy of 99,450MWH was attained on October 31, 2014.

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FG moves to recover debts from power firms

The Federal Government may recoup its money from debtor power distribution companies by calling on their bank guarantees. This, it was gathered, had been brought before Vice President Yemi Osinbajo, who is the Chairman of the National Council on Privatisation.

Mid last month, the Federal Government ordered the power distribution firms to remit the outstanding amounts for capacity and energy invoiced against them since February before the close of business on July 24, 2015. But two weeks after the expiration of the ultimatum, the affected power distribution companies have yet to comply with the directive.

Impeccable sources at the Federal Ministry of Power and the Nigerian Bulk Electricity Trading Company Plc told our correspondent on Thursday in Abuja that the Federal Government had through the NBET written to the Discos and their various banks notifying them of the intention to call on their respective bank guarantees.

A top management official of the NBET said the decision had not been implemented because the vice president recently held a meeting with operators in the sector and the issue was discussed. The official, who spoke on the condition of anonymity due to the sensitive nature of the subject, said, “We have written to the Discos and we have notified the banks that we intend to call on the guarantees. But how much of the guarantees should we call on is something that we are evaluating. 

But I can tell you that there have been some meetings at the highest level of government, where the Discos are consulting with the vice president, the Permanent Secretary of the Federal Ministry of Power and the Chairman of NERC.

“We also attended that meeting. And due to that intervention, we have to see how the outcome of that meeting goes. So, that’s really why we have to wait. The Chairman of the NCP is the vice president and he is serious about this issue. We have brought out this issue of poor remittances as one of the cases before him. So, we have to wait for the conclusion of that meeting to know what next to do.”

Another source at the Power ministry told our correspondent that when the Transitional Electricity Market was declared, the expectation was that all the Discos would make 100 per cent remittance to the government.

The Managing Director, NBET, Mr. Rumundaka Wonodi, explained to our correspondent that it was important for the Discos to remit funds to the government now that power generation was gradually improving. He said their failure to make stipulated remittances might result in a fall in power generation and that the government might not have enough funds to pay for generated electricity

“Generation is coming up and we need to be sure that money is being transferred from the distribution to the generation companies to incentivise generation. The gas suppliers are ramping up gas to the power industry; if the money does not get to the generation companies and they do not pay their suppliers, we may see supply falling,” Wonodi added.

Meanwhile, the Transmission Company of Nigeria has announced the attainment of an all-time maximum energy of 101,088 megawatt-hour wheeled through the national grid in a day. The TCN said in a statement signed by its General Manager, Public Affairs, Mrs. Seun Olagunju, that the feat was recorded on Wednesday, August 5, 2015.The company’s previous highest wheeled energy of 99,450MWH was attained on October 31, 2014.

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Court rejects NERC’s prayer to hike electricity tariff

A Federal High Court in Lagos on Thursday rejected the prayer by the Nigerian Electricity Regulatory Commission to give effect to its proposed hike in electricity tariff. The Chairman of NERC, Dr. Sam Amadi, had, at a press briefing in May, disclosed the plan by the commission to embark on an upward review of electricity tariff across the country effective from June 1.

But pursuant to an ex parte application filed by a Lagos-based lawyer, Mr. Toluwani Adebiyi, Justice Mohammed Idris, on May 28, restrained NERC from going ahead with the proposed hike. The commission, however, filed an application seeking to discharge the restraining order, as it claimed that Adebiyi misrepresented facts before the court and misled the court to grant same.

Counsel for the NERC, Mr. George Uwechue (SAN), also argued that the applicant failed to explore and exhaust all available remedies before rushing to court. But in a ruling on Thursday, Idris discountenanced Uwechue’s arguments and dismissed the application, as he held that the application was not filed within seven days as stipulated by Order 26 Rule 11 and the applicant did not seek extension of time.

This failure, according to the judge, had rendered the defendant’s application, seeking to discharge the restraining order, incompetent. “The ex-parte order of this court restraining hike in electricity tariff is valid and still subsisting,” the judge held. Earlier, the judge had struck out the preliminary objection filed by NERC, challenging the applicant’s locus standi to institute the action.

The judge held that the defendant breached the provisions of Order 29, Rule 4 of the court’s Civil Procedure Rules by failing to file its preliminary objection within 21 days of being served with the applicant’s originating summons. He held, “The learned Senior Advocate for the defendant holds the view that the provision is discretionary. I honestly and sincerely disagree with that view.

“In the circumstances, I hold that the preliminary objection was filed in breach of the rules of the court. “The objection filed is therefore, in my view, incompetent and is hereby struck out.” The matter was thereafter adjourned till September 23, 2015 for the hearing of the substantive suit.

Adebiyi is contending that the move by NERC to increase electricity tariff in the country would “foist further hardship on Nigerians.” According to the lawyer, any such increment in electricity tariff was unjustifiable in the face of poor or erratic supply of electricity by the distributing companies.

He prayed the court to stop any hike in electricity tariff until there has been a meaningful and significant improvement in power supply to at least 18 hours in a day in most Nigerian communities.
Among other things, Adebiyi is also asking the court to mandate the NERC to make available to all Nigerians, prepaid meters within a maximum time frame of two years.

This, he said, would curb “the throat-cutting, indiscriminate estimated bill, which must be devoid of the arbitrary service charge, but only chargeable on power consumers.” In his affidavit supporting the suit, Adebiyi lamented, “Businesses have collapsed, industries have closed down, and residents cannot sleep comfortably at night due to inefficiency of our power industry.

“Companies and commercial houses are groaning under throat-cutting power bill which they are paying for, yet not getting the benefit for such payment. “Bringing further increase amidst this tangled web of hardship and without any improvement in power supply will be highly unjustifiable and will be an economic burden on the Nigerian populace.

“It is totally absurd and not for the good of the people, and therefore must be stopped.”

-Punch

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Court rejects NERC’s prayer to hike electricity tariff

A Federal High Court in Lagos on Thursday rejected the prayer by the Nigerian Electricity Regulatory Commission to give effect to its proposed hike in electricity tariff. The Chairman of NERC, Dr. Sam Amadi, had, at a press briefing in May, disclosed the plan by the commission to embark on an upward review of electricity tariff across the country effective from June 1.

But pursuant to an ex parte application filed by a Lagos-based lawyer, Mr. Toluwani Adebiyi, Justice Mohammed Idris, on May 28, restrained NERC from going ahead with the proposed hike. The commission, however, filed an application seeking to discharge the restraining order, as it claimed that Adebiyi misrepresented facts before the court and misled the court to grant same.

Counsel for the NERC, Mr. George Uwechue (SAN), also argued that the applicant failed to explore and exhaust all available remedies before rushing to court. But in a ruling on Thursday, Idris discountenanced Uwechue’s arguments and dismissed the application, as he held that the application was not filed within seven days as stipulated by Order 26 Rule 11 and the applicant did not seek extension of time.

This failure, according to the judge, had rendered the defendant’s application, seeking to discharge the restraining order, incompetent. “The ex-parte order of this court restraining hike in electricity tariff is valid and still subsisting,” the judge held. Earlier, the judge had struck out the preliminary objection filed by NERC, challenging the applicant’s locus standi to institute the action.

The judge held that the defendant breached the provisions of Order 29, Rule 4 of the court’s Civil Procedure Rules by failing to file its preliminary objection within 21 days of being served with the applicant’s originating summons. He held, “The learned Senior Advocate for the defendant holds the view that the provision is discretionary. I honestly and sincerely disagree with that view.

“In the circumstances, I hold that the preliminary objection was filed in breach of the rules of the court. “The objection filed is therefore, in my view, incompetent and is hereby struck out.” The matter was thereafter adjourned till September 23, 2015 for the hearing of the substantive suit.

Adebiyi is contending that the move by NERC to increase electricity tariff in the country would “foist further hardship on Nigerians.” According to the lawyer, any such increment in electricity tariff was unjustifiable in the face of poor or erratic supply of electricity by the distributing companies.

He prayed the court to stop any hike in electricity tariff until there has been a meaningful and significant improvement in power supply to at least 18 hours in a day in most Nigerian communities.
Among other things, Adebiyi is also asking the court to mandate the NERC to make available to all Nigerians, prepaid meters within a maximum time frame of two years.

This, he said, would curb “the throat-cutting, indiscriminate estimated bill, which must be devoid of the arbitrary service charge, but only chargeable on power consumers.” In his affidavit supporting the suit, Adebiyi lamented, “Businesses have collapsed, industries have closed down, and residents cannot sleep comfortably at night due to inefficiency of our power industry.

“Companies and commercial houses are groaning under throat-cutting power bill which they are paying for, yet not getting the benefit for such payment. “Bringing further increase amidst this tangled web of hardship and without any improvement in power supply will be highly unjustifiable and will be an economic burden on the Nigerian populace.

“It is totally absurd and not for the good of the people, and therefore must be stopped.”

-Punch

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NERC licenses 4 companies to generate 774 MW of electricity

The Nigerian Electricity Regulatory Commission (NERC) has issued on-grid licences to four companies to generate 774 megawatts (MW) of electricity. The companies are to generate electricity from solar and gas. The companies are Pan Africa Solar Ltd., based in Kankia, Katsina State, to generate 24 MW from solar and Nigeria Solar Capital Partners Ltd., based in Ganjuwa, Bauchi State, to generate 100MW from solar.

Others are Proton Energy Ltd., based in Ogorode, Delta, to generate 150 MW from gas and Turbine Drives Ltd., based in Ajaokuta, to generate 500MW from gas. NERC Chairman, Dr Sam Amadi, who presented the licences to the companies in Abuja on Monday, told the companies to abide by the rules of the market.

Amadi said that rules and procedures guiding the operations of the market were globally comparable.
“We do our best to follow the rules which are globally comparable. “I want to reassure everybody that NERC over the years has built a reputation of consistent rules making and honest application of rules.

“We can pride ourselves probably as the most transparent agency in this country. “We will continue in the practice of openness, transparency and consultation by following the rules.” He said the commission was ready to support investors who were ready to invest in new energy sources to boost the power sector. The chairman assured that every company would get a cost reflective tariff as provided in the Electricity Act.

The Commissioner for Engineering Standards and Safety, Mr Abba Ibrahim, warned that the commission would revoke the licence of any company unable to deliver its mandate. He said that the commission would tighten up its operations as it continued to regulate the power sector. Similarly, the Commissioner of Legal, Licencing and Enforcement, Dr. Stephen Andzenger, urged the companies to live up to the expectations of consumers.

“We have been lenient in the past but we will no longer continue that way,” he said. The Vice-Chairman of Proton Energy Ltd., Mr Oti Ikomi, promised that the company would generate 500 MW in the second phase of the project. He described the licence presentation as a milestone in the change agenda of the present administration.

-PMNews

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