Consumers reject planned sale of power plants

By EDU ABADE, Business Editor

The Nigeria Consumer Protection Network (NCPN) has described the proposed sale of five National Integrated Power Projects (NIPPs) under the Niger Delta Power Holding Company (NDPHC) by the Bureau of Public Enterprises (BPE) as a miscalculated action with national security risks.

President of NCPN, Kunle Kola Olubiyo, who opposed the move following the commencement of special parliamentary inquiry into the planned sale of the assets this week, expressed concern that the ongoing process of selling the plants remains an ill wind that will blow nobody any good.

He argued that such a plan was self-serving and at best, constituted stripping of national assets at a time when President Muhammadu Buhari’s administration was already on the verge of completing its tenure.

BPE had recently pre-qualified 16 firms for the privatisation of the five plants, as the NCPN confirmed that has sighted records of firms bidding for the Geregu, Omotosho, Olorunsogo, Calabar and Benin-Ihovbor NIPP plants, adding that some of the firms have no requisite experience in power generation business.

The plants under the NIPP of NDPHC have always been the infrastructure supplying electricity and providing national energy security.

During the COVID-19 pandemic when the private investors of other Generation Companies (GenCos) lower electricity generation due to low revenue returns, the NIPPs being public assets, provided the country the much-needed energy security and its attendant socio-economic stability as it had to raise power supply to avoid economic and administrative shut down of the country.

Olubiyo maintained that the private firms in the power sector so far have not fared better than the NDPHC GenCos, which have its gas obligations, gas pipeline assets and contributed to transmission and distribution networks across the country.

“Recently, the gas producers have allegedly made claims of a legacy debt of over $1 billion. The legacy gas debts were accumulated over a long period of time and if at any point they stop supplying gas to the GenCos, Nigeria could be plunged into darkness if the NIPP GenCos are sold off and the entire power sector upstream is left at the whims and caprices of private sector investors.

“Even when some of the NIPP/NDPHC GenCos have not been put to optimal use, the country is still seeing their impact on the national grid, while serving as the nation’s energy security backups. What BPE and any designated agency of government should be thinking of at the moment is how to optimise the NIPP/NDPHC GenCos so that Nigerians can make the best use of the power sector intervention, as that was what they were designed for,” he stated.

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He maintained that the NIPP interventions, which cut across the power sector value chain and implemented by NDPHC required that the Nigerian Electricity Regulatory Commission (NERC) would have evaluated them and determined their real value.

Olubiyo, however, lamented for over nine years, the NERC has been endlessly doing evaluation of these investment values without result, adding: “Without the evaluation to determine the Capital Expenditure (CAPEX) in the NIPP power sector intervention projects, NDPHC has been continually short-changed of the revolving funds that should be reinvested in other power interventions in line with Nigeria’s energy access for 2030 targets.”

Maintaining that the NCPN was opposed to any move to sell the five NIPP GenCos at the moment, he said the electricity consumers were not saying that the plants would not be sold at the right price and at the right time in the future but not at this time when the country was battling challenges of load rejection by the DisCos, low energy dispatch by the Transmission Company of Nigeria (TCN) and load dispatch managers from the various centres and the National Control Centre in Osogbo, Osun State.

“It is electioneering time and we believe that even if the five NIPP GenCos are sold, the proceeds may not be useful for the country and may just go into the pockets of politicians at all levels of government rather than reinvesting in NIPP/NDPHC revolving funds that could help in
increase the investment milestones and expansion of the original ideals of NIPP project’s conceptualisation.

“Selling off the five NIPP plants may not guarantee their optimal performance as the new investors will have to begin a fresh journey of having some levels of Power Purchase Agreements (PPAs) and Vesting Contracts with the Nigerian Bulk Electricity Trading Plc (NBET).

“However, at the moment, NDPHC has some already signed bilateral contracts for Take or Pay deal for gas supply agreement for some of the GenCos and come handy, to operates as national energy security backups, even private GenCos embark on strikes, thus serving as core energy security backup for the country, while earning revenue for the government.

“We advise the Federal Government to collaborate with experts and professionals within and outside the power sector to initiate a comprehensive mechanism to address the decline in growth in the areas of universal access to energy security, decline in energy load dispatch by TCN, generation capacity and energy load utilisation by the DisCos.”

He urged the House of Representatives Special Investigative Public Hearing to look into the basics and fundamental challenges and help in the overall public interest to avert energy crises that might result from BPE’s planned sale of the five NIPP/NDPHC power plants.

He advised the Federal Government to also learn from the poor implications and delivery of the 2013 power sector privatisation exercise also carried out by the BPE.

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