Grid Collapse: NERC Admits Owing GenCos N1.6trn, Assures Of Payment

The Nigerian Electricity Regulatory Commission has said that the N1.6trn debt owed Power Generation Companies is a normal trade issue, stating that efforts are on to settle the operators.

NERC’s Assistant General Manager, Public Affairs, Michael Faloseyi, made the comment in a Channels TV interview on Wednesday while responding to the electricity situation in the country.

The GenCos under their umbrella body, the Association of Power Generation Companies had on March 13, accused the NERC of refusing to settle N1.6trn debt owed its members for power generated.

The debt which had been accumulating since 2013, had made the operators threaten to shut down their plants.

“Currently today on capacity paid for, we are owed by the Nigerian Bulk Electricity Trading Plc N1.6trn. If the government can clear our outstanding debt, give us foreign exchange to maintain our plants, we are ready to generate up to 8,000-9,000 Megawatts, mechanically we are available,” said Joy Ogaji, the Executive Secretary of APGC.

The NBET was set up in 2010 to purchase electricity from the GenCos through Power Purchase Agreements and sell to the Distribution Companies through Vesting Contracts.

The national grid collapsed twice in two days on March 14 and March 15 after the threat by the GenCos to shut down.

Faloseyi said, “We have a position of not joining issues with any of our licensees on the pages of newspapers. We give a licence to individual companies not to an association.

“We are addressing those issues that are put before the commission and we are on top of every situation to make sure that all power plants are operating as a going concern.

“That somebody is owed, it is a trade issue, there is no business that you don’t have somebody owing somebody. It does happen. So, it doesn’t mean that whoever is in charge will go to sleep. Those issues are being addressed.”

Although Faloseyi was not specific about the timeline, he said NBET, which is a stopgap measure to address the debt, has initiated a process which would help pay up the debts.

Faloseyi said, “There is a Power Sector Recovery Programme of the Federal Government being supervised by the commission addressing all these payment issues and they are being attended to, one after the other. The PSRP is set to address the issue raised by the generators.”

When asked if the collapse of the national grid has connection with the threat by the GenCos, he said the NERC is not aware.

He added, “I can’t address this. They are businessmen and I think some issues need to be put at the front burner for whatever purpose.

“They are businessmen, their money, even to the last kobo matters to them. But as far as the regulator is concerned, all issues in the industry are being attended to.”