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Electricity: Gas suppliers demand cash before delivery

By on June 2, 2017

The Association of Power Generation Companies (APGC) has said the gas-fired Generation Companies (GenCos) owe gas suppliers about N200billion debt which has cut further credit supply from the firms.

The Executive Secretary, Dr Joy Ogaji at a briefing in Abuja yesterday said GenCos are only operating few turbines to generate power based on the quantum of gas they can pay for immediately.

The Daily Trust reported on Tuesday that 35 turbines were idle across 15 gas-fired GenCos, causing the loss of 2,514mw mostly due to poor funding of gas fuel.  Record shows the national grid dropped to 3,914 megawatts (mw) yesterday from the 4,400mw attained on Monday.

Giving the reasons, Dr Ogaji said, “To procure gas, we need money. Currently, GenCos are being owed N600 billion and owe gas companies nearly N200 billion. Most gas suppliers now say they can’t supply anymore until we pay.

“Most of them like Shell, Total now do pay-before-service and the electricity market is only remitting about 30 per cent. Most of the GenCos can’t operate all their machines; it depends on what they can pay. We are in that state, a precarious and pitiable one,” she lamented.

Ogaji also supported the declaration on Eligible Customers by the Minister of Power, Works and Housing, Mr Babatunde Fashola that certain customers who are willing and have the capacity can procure power directly from the GenCos without using the Distribution Companies (DisCos).

She said DisCos can now take extra power to improve supply beyond the daily allocation they get for their franchise areas. “DisCos are actually able to get power through this arrangement on the grid. Those DisCos who are willing to get additional power qualify as Eligible Customers as well.”

The APGC spokesperson said the declaration will boost liquidity in the power sector and stimulate more competition for the DisCos, the Transmission Company of Nigeria (TCN) and the GenCos to serve customers for the better.

The eligible customer directive is yet to commence as she said the Nigerian Electricity regulatory Commission (NERC) is working on the framework that will address registration process, tariff setting among others.

 

[Daily Trust]