Abuja: FG, Power Operators Firm up TEM Contractual Agreements

Source: THISDAY LIVE

Operators in the electricity sector and the federal government yesterday initiated key processes that would see to the firming up of extant contractual agreements that were reached by all parties for the Transitional Electricity Market (TEM) to take off.

Accordingly, under the TEM which ought to start with the implementation of cost-reflective retail electricity tariffs in the market, all participants in the market: electricity distribution company (Discos), generation companies (Gencos) and the Transmission Company of Nigeria (TCN), among others, will all have to play by the rules and regulations that govern the contracts they signed.

But speaking in Abuja at the inaugural monthly peer review meeting which was initiated by the government to track developments in the sector, the Minister of Power, Works and Housing, Mr. Babatunde Fashola, told journalists that the meeting would be an avenue for the leadership of the industry to lay bare all the constraints being experienced in the sector in order to proffer solutions to them one after the other. 

Fashola who spoke after the Permanent Secretary in the Federal Ministry of Power, Mr. Louis Edozien, said in his introductory remarks that the meeting was a continuation of the TEM in which players would have to behave in a contractual manner.

“This meeting is supposed to be a follow up of the  entry into a Transitional Electricity Market (TEM) where everybody behaves in a contractual manner. So, we thought it expedient to invite the leadership of the  operators of the Industry to in a very focused manner examine all the constraints we are experiencing as an industry, in operating a market-driven, a contract-driven industry.

“And  arising from the deliberation, we will begin in a very deliberate and focused manner to resolve one by one all those problems,” Edozien said.

Fashola who presided over the meeting noted that the idea behind the meeting was to hear from the operators in the industry for possible comprehension and the application of relevant solutions to the challenges.

Fashola said: “Let me start by saying first that the idea behind this meeting is to listen to as much of the operators in the power industry as possible to understand what the unique problems are, to understand what the general problems also are, and to develop solutions to them as in line with the federal ministry of power and housing or as in line with the agencies who are agencies of government.”

The intentions of the meeting, Fashola further explained, was to also initiate monthly peer review and idea sharing for operators to learn from each others, challenges and successful solutions.

He said that through the monthly exercise which would be held every second Monday of other months, operators in the sector would learn from their areas of strength and weaknesses.

The minister however appealed to the operators not to send representatives who cannot take bidding decisions on behalf of their organisations to the monthly meetings, adding the  that essence of the meeting was to ensure that those who attend them either as teams or groups, take decisions that can be implemented by them and still remain committed to other resolutions.

“I welcome those of you who have come. I also appeal to those who are not here to think about signing onto this platform. What we have also sought to do is to have at least one representative of each major Disco, Genco, power players in the industry, who can take decision on behalf of their organisations so it will do us very well to avoid sending representations, who cannot take decisions.

“The plan is that as a group, as a team, we take decisions and go and implement them and commit ourselves to those kinds of decisions,” the minister said.

Fashola also explained that both President Muhammadu Buhari and his Vice President, Yemi Osibanjo had been briefed about the meeting and they approved of it.

“What we have decided to do is that this meeting will hold every second Monday of the month so it is a calendar subject. Of course, any second Monday that falls on a public holiday, it will go to the next day after that Monday automatically.

“Let me say also that we have briefed Mr. President and Vice President about these meetings and we have their approval to convene them,” he added.

Fashola said that the federal government was of the hope that since there are engineers, bankers and other professionals in the power sector, they could share all the problems and proffer solutions to solving them.

He submitted that: “If our purpose is united, if our understanding is united, I don’t see any problem we cannot defeat as a team.”

The minister noted that the outcomes from the meetings would be provided to Nigerians to enable them hold the government and operators accountable to their commitments. According to him, discussions at the meeting will centre on the issues around scaling up the transmission capacity, improved metering of consumers, gas supply challenges, revenue collection and debts, quality of service, new captive and embedded generation and franchising, as well as disptach procedures and adherence to discipline.

He said: “All the information will revolve around the major issues in the industry, about what steps will be taken about gas, about what steps will be taken about ramping up transmission capacity, about what steps will be taken about distribution, about what steps will be taken about metering roll out.

“This meeting should be the information centre for every Nigerian for holding Disco, every Genco, every TCN accountable at various levels.”

Edozien who disclosed what would be discussed at the inaugural edition of the meeting said: “The first point is public engagement, especially around the newly released tariff. It is something we all have to do collectively.

“The second point relates to issues on collection, payment and debts. It also includes discussions on metering.”

Others he said included generation capacity and maintenance, ancillary services and dispatch order, procedure and discipline, gas requirement and constraints, transmission constraints and 33kV load off-take and imbalances.