Reps Committee Accuses Discos of Sabotaging Power System

The Power Sector Crisis in Nigeria: A Call for Accountability

The Nigerian House of Representatives Ad hoc Committee, tasked with investigating the power sector reforms and expenditures from 2007 to 2024, has raised serious concerns about the performance of electricity distribution companies (DisCos). The committee has accused these companies of significantly undermining the country's power supply system through years of inadequate investment, lack of expansion, and failure to meet their original business commitments.

During a recent hearing, the committee chairman, Arch. Ibrahim Almustapha Aliyu, highlighted that most DisCos misled the government during the acquisition process by presenting ambitious business plans but failing to deliver on the necessary infrastructure upgrades. This lack of action has left the distribution networks in a state of disrepair more than a decade after privatization.

Aliyu expressed his disbelief at the situation, noting that while the Transmission Company of Nigeria (TCN) claims it can wheel up to 8,000 megawatts, the DisCos are only able to absorb about 4,000 megawatts due to limited infrastructure. He described this as a self-inflicted problem, emphasizing that the DisCos have not fulfilled their responsibilities.

He pointed out that the power distribution firms have "refused to invest, refused to expand, and refused franchising options," which has led to widespread energy theft, meter bypassing, and increasing consumer apathy across the country. "You caused this problem because you could not expand from what you inherited," he said. "If you had made the necessary investments in substations, modern transformers, and proper network expansion over the past 13 to 14 years, there would be no issue."

Aliyu further explained that many consumers resort to illegal connections because they are billed monthly for electricity that is either inadequate or not supplied at all. "How do you expect someone whose monthly bill equals their salary to keep paying? People will seek alternatives. Your refusal to invest has contributed to this unholy practice of bypassing and stealing energy," he added.

The committee chairman reminded the DisCos that Nigerians experienced better power supply during the days of NEPA/NITEL and expected significant improvements after private investors took over. He challenged the DisCos to reconcile their initial claims of competence and financial capacity with their current inability to meet tariff obligations, expand networks, and deliver quality service.

The Impact of Subsidies on the Power Sector

During the same hearing, Dr Mahmood Abubakar, Chief Regulatory and Compliance Officer of Kaduna Electric, provided insights into the challenges faced by the power sector. He stated that approximately 60% of the electricity supplied nationwide is subsidized, a situation that weakens investor confidence and limits the ability of DisCos to make necessary capital investments.

Abubakar noted that only about 40% of the electricity, mostly consumed by Band A customers, is cost-reflective, while the rest depends on government subsidies that are often delayed or unpaid. He emphasized that because DisCos cannot recover their full revenue requirement, they struggle to secure investments or loans needed for network upgrades.

"The subsidy is not forthcoming as and when due. It comes whenever the government decides to pay. That is the reality, and it affects everyone. We cannot pay our market invoices fully, the Gencos cannot fulfill firm contracts with gas suppliers, and the whole chain is weakened," he said.

The Path Forward

The issues highlighted by the committee and the DisCos underscore the need for a comprehensive review of the power sector. Addressing the infrastructure gaps, ensuring timely subsidy payments, and fostering a more transparent and accountable system are critical steps toward improving power supply in Nigeria.