Most of Abia State has since this morning been thrown into unprecedented and indefinite darkness by the Market Operator, an arm of the Transmission Company of Nigeria (TCN) in a move regarded in the power sector as a punitive measure against the country’s newest electricity distribution company, Aba Power Limited, over payment of statutory fees to federal government agencies.
The TCN, the country’s sole transmission firm, wrote a letter to Aba Power on April 19, 2023, with reference number TCN-MO-003-APL-049-VOL2-202, directing it to pay N869210.059.58 within 30 working days, but the same day the same company wrote a letter, with reference number TCN-MO-003-APL049-VOL-202, to the Market Operator instructing it to disconnect Aba Power from the national grid from April 21, 2023.
“It is strange how the two letters emanating from the same source could contradict each other”, noted Engineer Ben Caven, a former executive director of the National Electric Power Authority (NEPA) reputed to be the only person to have headed the Transmission, Generation and Engineering divisions in the defunct power parastatal.
“I want to assume that there is no sinister motive, but a situation where a letter was written on April 19, delivered the next day to an electricity distribution company and then cut off power supplies to the distribution company within a couple of hours the same day over a debt of a whopping N896m is unprecedented.
“I am distressed by the fact that the action took effect on a public holiday which began a long weekend.
“The persons who gave the directive could not respect the sensibilities of Muslims celebrating the Eid el Fitri feast, after 30 days of fasting”.
Patrick Umeh, the Aba Power managing director who used to be a commissioner with the National Electricity Regulatory Commission (NERC), denies that his company has been nonchalant towards the payment of fees to government agencies.
He told journalists on the phone this morning: “Despite the huge difficulties that confronted Nigerians between January and April as a result of petrol scarcity and the naira redesign which, in turn, affected our customers’ ability to meet their obligations to us during this period, we were able to pay N50m to the Market Operator at the end of March.
“We also paid last month N500m to the Niger Delta Power Holding Company that sells electricity to us”.
Aba Power became Nigeria’s 12th and newest electricity distribution company on February 16, 2022, when it paid $26m to the Enugu Electricity Distribution Company (EEDC) and Interstate Electrics to acquire the Aba Ring-fenced Area comprising nine out of the 17 local government areas in Abia State, though full control of the area did not occur till six months later when it was allowed to collect revenue from customers.
For half a year the company, according to Umeh, bore the brunt of paying for electricity and staff salaries alone and without compensation to this day.
“Our monthly obligation to the Niger Delta Power Holding Company (NDPHC) came to almost N800m when we raised power supply to the ringfence from 25megawatts to 80MW”, said Umeh, who was also an executive with the Los Angeles Water and Power Corporation in the United States
Cliff Eneh, an energy consultant in Lagos who was a senior engineer with both the Power Holding Company of Nigeria (PHCN) and the Texas Light and Power in the United States, said that the punitive measure against Aba Power “is absolutely unfair because the authorities know that the new distribution company has spent millions of dollars to bring the dilapidated distribution infrastructure in the Aba Ringfence to world-class, thus making Aba, the capital of indigenous Nigeria’s indigenous technology, have new 1,500 kilometres of overhead wires, four brand new substations, and three refurbished ones”.
Engr Eneh observed that the country’s other 11 distribution companies have not been switched off from the national grid despite repeated failures to meet their obligations to the TCN and the MO since they were established in November, 2013.
“It is doubtful”, continued the consultant, “that the distribution companies in Yola and Jos, for instance, pay beyond 15 per cent of what they should, but they haven’t been cut off because of the grave security implications.
“Hospital services and other essential services will be disrupted severely, to say nothing about manufacturing companies”.
Given the fact that the Aba Ringfence was thrown into the darkness between March 15 and 18 over payments to Federal Government agencies, according to Engr Eneh, “the new action by both the TCN and the MO cutting off supplies to the area appears selective”.
He recalled that the Federal Government has been subsidising the 11 old distribution companies enormously since their privatisation, pointing out that the government paid a subsidy of N120bn in 2022 alone.
The 11 DisCos, he said, were expected to pay the Market Operator N70bn in the first quarter of last year, but paid only N35.2bn.
“Still, no one cut them off from the national grid, nor were there threats to do so”, he stated.
“It is difficult to fathom the ongoing unbearable pressure on Aba Power which has never received a Kobo subsidy.
“Disconnecting Aba Power will make matters worse for everyone, including the TCN and the MO that cannot earn any money anymore from most of Abia State”.
The Aba Power MD pleaded that the firm be given some time to sort out its debt to the TCN and the MO in consideration of the tremendous economic challenges in the country.
He concluded: “Very soon, we will commission the Geometric Power plant in Aba, from where we will get our own electricity and provide our customers constant, quality and affordable electricity”.