The Minister of Power, Adebayo Adelabu, has issued a stern warning, threatening to revoke the licenses of underperforming companies in the Power sector. According to him, ten years after the privatization of the sector, the Nation has continued to grapple with severe shortage of electricity from the national grid emphasizing his preference for the commercialization of the sector over privatization.
Meanwhile, the Chairman of the Nigerian Electricity Regulatory Commission (NERC), Sanusi Garba, announced a five-year extension of operational licenses for distribution companies. This extension shifts the expiration date from 2013 to 2028. The move aims to provide more time for these companies to meet the expected operational standards and contribute to the improvement of the power sector.
However, operators within the power sector are adamant that the industry must adopt a cost-reflective tariff system to cope with the current economic challenges, such as high exchange rates and inflation, which have driven up operational costs. They argue that a tariff structure that accurately reflects the costs of providing electricity is essential for sustaining and developing the sector.
These developments and discussions unfolded during the Nigerian Electricity Supply Industry (NESI) Market Participants and Stakeholders’ Roundtable (NMPSR), which commenced in Abuja. The event, spanning three days, brought together industry experts and stakeholders to address the persistent issues within the power sector.
The Minister’s stern stance reflects the government’s determination to hold companies accountable for their performance in delivering electricity services to the Nigerian populace. The extension of operational licenses, on the other hand, seeks to provide these companies with an extended timeframe to align with expected operational standards and help improve the reliability of the power supply in Nigeria.
