₦airaland Forum

When a problem with a simple solution seems like it cannot be solved no matter what, just know that some people somewhere in high places are profiting from that very 'problem'

nairalanda1:
And I have a question for you....if you invest in a business, but are prevented from making a profit by the government forcing you to sell at a loss, would you make a profit at all?

Discos naturally have invested money (and in the case of ABUJA disco, which supplies where i live)..fixed up some things. What we are quibbling over is the ability of the discos to keep those things running, and to make more investment, hence my question to you?

you failed to answer the question or rightly you do not k now.There is no shame in admiting you dont know.I have worked in major i nfrastructure round the world in stuff like this and I sort of have an insider hence Im saying what I am saying my question are to geer you into same atmosphere so we can have a convo.The answer to my question is almost ZERO, the inherited old nepa pay offices and thier staf which by the way ir reducing by the day.Prepaid has cut the numbers of workers down to the bare minimum as they now have no wire to cut but patrol.

erico2k2:
you failed to answer the question or rightly you do not k now.There is no shame in admiting you dont know.I have worked in major i nfrastructure round the world in stuff like this and I sort of have an insider hence Im saying what I am saying my question are to geer you into same atmosphere so we can have a convo.The answer to my question is almost ZERO, the inherited old nepa pay offices and thier staf which by the way ir reducing by the day.Prepaid has cut the numbers of workers down to the bare minimum as they now have no wire to cut but patrol.

In other words, you want cheap electricity.

Odidigboigbo:
How can we make progress when we keep on blaming others instead of accepting responsibilities. Obasanjo left the stage more than 20 years ago, what significance improvements was made after his exit? I hope you are not the type that blame your father, even your forefathers for your present situation?

Ọdẹ
So because he's out of power, we should forget about him and his atrocities?
Are you not the product of your past at the moment?
The major reason why we can't progress is because we don't hold people accountable for their past actions.
If your father has taken some decisions that makes you not to have hands and legs 20 years ago till date, will you still be making reference to him or not?

nairalanda1:
And I have a question for you....if you invest in a business, but are prevented from making a profit by the government forcing you to sell at a loss, would you make a profit at all?

Discos naturally have invested money (and in the case of ABUJA disco, which supplies where i live)..fixed up some things. What we are quibbling over is the ability of the discos to keep those things running, and to make more investment, hence my question to you?

Power sector i n Nigeria is diveded into Generation, Transmision and the end sales people AKA DIscos,
so what you are saying is to side with the Discos to increase cost to the end consumer whan in fat the producers did not increase power cost?
SO if you are a distributor and you buy from me @ N10 and sell at 10% profit via regulations for tha past 10 years nothing happened I never increase my price you suddenly want o to increase yours to 20% profit and you want the FG to sit back cos you must make profits? Its the FGs right to protect consumer if not we dead. Let me also tell you something I know from inside, the DISCOS are the major benefactors in all this, they add nothig and claim a lot ask me how?

nairalanda1:
In other words, you want cheap electricity.

IS there anything like cheap Electricity/power in Nigeria?That word does not remotly exist, even people living in the remotly enclave caves in Nigeria get to pay too much for power. Try and run your home with your own power for 24 hours and see how much it cost.Do you know that 70% of our telecom cost is due to them providing thier own power?

NB the average Nigerian home or family in a 2bed flat will pay N25k for electricity when there is power, the back it up with petrol at least N40k a month. Now the N25k a month they pay to Discos is for nothing less than 40% of power time, spot the scam yet?

tsdarkside:
your ancestors were moldin iron even before europeans landed at your shores....

you cant even bring ajaokuta to work yourself today....

excellent comment.

nairalanda1:
16 billion is not enough to fix power in Nigeria.

We need something like 30 billion or more per annum to fix power in Nigeria.

But what did they achieve with the 16 billion?

erico2k2:
IS there anything like cheap Electricity/power in Nigeria?That word does not remotly exist, even people living in the remotly enclave caves in Nigeria get to pay too much for power. Try and run your home with your own power for 24 hours and see how much it cost.Do you know that 70% of our telecom cost is due to them providing thier own power?

So, why are you arguing against my post? Why are you concerned about how much discos spend or otherwise?

Good morning.

erico2k2:
Power sector i n Nigeria is diveded into Generation, Transmision and the end sales people AKA DIscos,
so what you are saying is to side with the Discos to increase cost to the end consumer whan in fat the producers did not increase power cost?
SO if you are a distributor and you buy from me @ N10 and sell at 10% profit via regulations for tha past 10 years nothing happened I never increase my price you suddenly want o to increase yours to 20% profit and you want the FG to sit back cos you must make profits? Its the FGs right to protect consumer if not we dead. Let me also tell you something I know from inside, the DISCOS are the major benefactors in all this, they add nothig and claim a lot ask me how?

No, they are not. If they were, they won't be declaring force maejure.

I suggest you read the PwC report on the power sector. But then again, knowing that you want cheap power really, you won't read it.

Good morning.

money121:
But improve for my area
At least 18 to 20hrs electricity sure for my side
I don't know about urs ooo

Same here too. If not boasting, 21 hours

nairalanda1:
So, why are you arguing against my post? Why are you concerned about how much discos spend or otherwise?

Good morning.

Cos they are tieves, the are the real problems of Nigerians, just that people are not wise enough to notice, they are the real criminals when it comes to power end users.
1 They are the ones who return power back to Gencos but still deliver estimated bills to end users and pocket eh money with no power served
2 They are the ones sitting on Prepaid metres to ensure we continue with this estimated bill regime
3 Even when the Fg said Prepaid meter was free, they racket it and sell for up to N80k a time for a single-phase metre.
4 They are same group of people who will conive with consumers to by pass electricity and go round to get thier other mates to come and investigate and arrest or fine the culprit(I have witnessed this 1st hand)
you want more?

iwaeda:
Fashola is a scam. Atleast people now see difference between PDP People's oriented programs and APC self serving. Anyways, Ebi oti panyin.

PDP is doing a terrible job of getting people to thoroughly understand the difference between them and APC.

Those of us who also know the difference have a duty to educate others for the sake of a better society that serves us all, and makes individual success much easier.

Tinubu has promised you stable electricity yesterday

Just like Buhari and fashola delivered in just 6 months

nairalanda1:
No, they are not. If they were, they won't be declaring force maejure.

I suggest you read the PwC report on the power sector. But then again, knowing that you want cheap power really, you won't read it.

Good morning.

We blacks typically want to have not just something, but everything without paying anything hence our PRIMITIVE inclination to big government socialism that makes corruption easier and worsens the society.

UncleKoboko:
Ọdẹ
So because he's out of power, we should forget about him and his atrocities?
Are you not the product of your past at the moment?
The major reason why we can't progress is because we don't hold people accountable for their past actions.
If your father has taken some decisions that makes you not to have hands and legs 20 years ago till date, will you still be making reference to him or not?

Ok continue the blame game and see where it will lead you to. If you are employed in an organisation to solve a problem, I hope you will still carry this mentality of blaming others (Former colleague) that have left the organisation as the reason you can deliver on the job,if at all they have done anything wrong. Try it and see if you won't be shown exit door.

erico2k2:
Cos they are tieves, the are the real problems of Nigerians, just that people are not wise enough to notice, they are the real criminals when it comes to power end users.
1 They are the ones who return power back to Gencos but still deliver estimated bills to end users and pocket eh money with no power served
2 They are the ones sitting on Prepaid metres to ensure we continue with this estimated bill regime
3 Even when the Fg said Prepaid meter was free, they racket it and sell for up to N80k a time for a single-phase metre.
4 They are same group of people who will conive with consumers to by pass electricity and go round to get thier other mates to come and investigate and arrest or fine the culprit(I have witnessed this 1st hand)
you want more?

1.Because the low prices they are forced to charge means they do not have enough to pay GENCOS...hence their rejection of power.

2. Well, MAP is solving that problem, plus when they are forced to charge low prices, thus they have to use illicit means to earn more money. Like estimated billing.

3.Same reason as no 2.


4.Because Nigerians bribe them to do so...which takes us back to the issue of corruption being a serious issue.




You want cheap power anyway, so the reasons are superfluous.

UncleKoboko:
Ọbasanjọ really destroyed this country.

Same bastard that spent about 20 billion dollars on the sector back then, amount equivalent to 100 billion dollars now.

Half of this money is money than enough to build a nuclear power supply for the sole purpose of electricity.

- Same man that gave out Bakassi peninsula
- Same man that turned Ota farm he used public money to build to his personal property.
- Same man that sold OIL BLOCS to his friends, allies and even concubines...

---

Sadly, electricity problems is what many countries around the world has been able to solve and control.
If Benin republic, Ghana, Gambia etc rarely have power outage, WHAT IS THE PROBLEM OF NIGERIA?

Most of you know nothing . You're just ignorantly blaming obj for nothing. Obj built all the power plants which our national grid is feeding on today. Do you know how much it costs to build a power plant? Ask tony elumelu on how much he spent on the Geregu Power plant. You think once you connect wires to the grid, there would be light in every home? No!

Blame IBB, Abdulsalaam Abubakar, Jonathan's wife, Tinubu, etc who bought gencos/discos without knowledge of power. GE bidded for Same but they sidelined them. These are the problems of Nigeria but you guys are still busy worshipping them. You may not see Tinubu's name on the list but as smart as he is, he uses proxies to do all these.

JoshTim:
Privatization was not properly done. It was merely contracted based on man know man than competence and track record.

The transmission sector handled by FG still remains the bottleneck in the power industry, then TCN capacity is 7,100MW for a generation of 13,000MW and it is what is transmitted that can be distributed.

nairalanda1:
In other words, you want cheap electricity.

Where is d cheap electricity in Nigeria? People are paying for the electricity they did not use every month. When a transformer spoils, the occupant of the streets are responsible for the repair. Presently 80% of homes are yet to be equipped with prepaid meters. Why? The Reason is fraudulent, they make more money from excess billing of people for d electricity they did not use......yet someone up there was saying people are not paying enough.

nairalanda1:
No, they are not. If they were, they won't be declaring force maejure.

I suggest you read the PwC report on the power sector. But then again, knowing that you want cheap power really, you won't read it.

Good morning.

You have no idea have you? check my profile very well, I am a fluid Engineer and has worked extensively in the Nigeria power sector based in the Uk but go round the world with ABBA, I have done stuff in Sapele ,Ughelli, Benin etcLet me tell you, the biggest scam is in the power sector not NNPC, the quicker you guys realize this the quicker you come to up to date awareness or else Nigerians are fvct literally.

Read this
https://businessday.ng/lead-story/article/discos-plan-to-buy-power-from-gencos-hits-hurdles/

Electricity sector operators are negotiating bilateral contracts to enable power purchase agreements in the contract market phase set to begin in July, and parties to these negotiations tell BusinessDay that there are knotty issues.
Some of the highly indebted distribution companies (DisCos) have not made adequate investments in their networks including installing meters in their substations to capture the amount of electricity they receive. Also, the Transmission Company of Nigeria (TCN) lacks the capacity to wheel all the contracted power, making agreements difficult to reach.
The Nigerian Electricity Regulatory Commission had planned to move the electricity market into a full Transitional Electricity Market (TEM) Phase, which is the intermediary step between an integrated total utility and a fully competitive market structure with more varied market players, structured to bring competition into the market.
Read also: DisCos report N188 bn revenue in Q2 2022, lowest in four quarters
After TEM, a multiple buyer model is supposed to follow and this allows customers and DisCos to buy electricity through bilateral contracts with the bulk trader, in addition to buying directly from generation companies (GenCos) and independent power producers.
In the electricity value chain, the government is the wholesaler. GenCos are producers, while DisCos are retailers. Bilateral arrangements are meant to remove the wholesalers in the value chain and allow the retailers and producers to interact directly and freely, analysts say.
This was supposed to have happened in July 2022 but the market was not ready. Now it seemed ready to kick off, with implications for customers, both residential and industrial.
“This will translate to consumers having more hours of electricity available, which might impact the price they are currently paying. The cost of a kilowatt per hour will increase,” said Habu Sadik, a financial analyst and energy sector expert.
Sadik said the bilateral stage will be brutal and effective. “A DisCo can use any method possible to recover their money because failure to do that will put them out of business.”
It would also open up the sector as DisCos would find value in delivering better supply to customers with the ability to pay including estates and companies.
Three DisCos – Eko Electricity Distribution Company, Ikeja Electric, and Abuja Electricity Distribution Company – have recently been instructed by NERC, the regulator, regarding the implementation of bilateral contracts with GenCos.
These negotiations are contending with inefficiencies that have been glossed over in the electricity sector for a long time, according to some parties who did not want to be mentioned as they are not authorised to disclose the negotiations.
The existing contracts in the Nigerian energy supply industry see the Nigerian Bulk Electricity Trading Plc (NBET), the manager and administrator of the electricity pool in the industry, buy energy and capacity from 26 generation plants owned by the respective GenCos that have contracts with NBET.
Some GenCos have power purchase agreements; others have interim agreements executed pending formalisation on power purchase agreements (PPAs). The electricity purchased by NBET through PPAs are resold to DisCos through vesting contracts and transported on a physical network that forms the electricity value chain. Other contractual arrangements include gas supply agreements, gas transportation agreements, and grid connection agreements.
One key challenge is developing a mechanism for the conversion of vesting contracts into bilateral agreements between GenCos and DisCos.
The process for such migration or procurement is a crucial factor that needs to be managed within such a framework, experts say.
For these contracts to work and the market to be liquid, DisCos must be credible off-takers and other parties must be credit-worthy.
This has not been the case in the sector. Market collections by DisCos have been largely inefficient. The total revenue collected by all DisCos in the fourth quarter of 2022 was N243.65 billion out of N332.28 billion billed to customers, translating into a collection efficiency of 73.33, according to the regulator’s
latest report.
Under the bilateral agreement, DisCos have to fully collect for the value of the energy it received, so a sticking point is who settles the differential since NBET would no longer provide a guarantee.
In the interim, the Nigerian government has set a N5 billion Gas Stabilisation Fund to guarantee gas supplies to the power sector but it’s yet to make a difference. GenCos have been unable to ramp up generation as gas companies demand upfront payment due to an inability to settle previous debts.
Another sticking point is acceptable tariffs that would guarantee commercial returns. NERC is required to recognise any bilateral rates that are agreed upon when a DisCo chooses to purchase electricity from a GenCo or an independent power producer, provided that the procurement process is conducted prudently, even when the agreed prices are higher than the MYTO benchmark price for generation.
The challenge is some operators cannot justify the basis for the tariff they are proposing. According to MYTO rules, operators must show evidence of investment into the network before making claims and the regulator must be satisfied that the costs were indeed inputs towards the service. In this vein, the NERC would not recognise N50 million executive car purchase as part of expenses that would be factored into tariff computation.
Some of the inefficiencies covered up because the NBET was around are now getting enough sunlight and causing disagreements. The TCN, for example, claims to have the capacity to wheel over 7,000MW of power generated daily but in reality cannot wheel more than 4,500MW without the grid collapsing and would be required to repay other operators if it failed to wheel all the energy generated.
After the Partial Activation exercise, which was overseen by NERC and the NBET with the goal that at least 5000MW of power was generated, paid for in full, and successfully delivered to consumers daily with effect from July 1, 2022, failed, the bilateral power contract has come into play.
One key benefit of this phase, according to energy lawyers at Oake Legal, is that it will enshrine market discipline among the industry operators through the mechanism of liquidated damages for breach of service level obligations.

It has improved... Stop lying

Corrections:
Where is d cheap electricity in Nigeria. are paying for the electricity they are using every month. When transformer spoil, the occupant of the streets are responsible for the repair. Presently 80% of homes are yet to be equipped with prepared meters. Why? The Reason is fraudulent, they make more money from excess billing of people for d electricity they did not use.

We actually have been paying subsidised prices for power for decades. That means cheap prices, which means no profit for the sector...which is why they cannot afford to replace ailing transformers (although transformers break down easily because poor planning of cities means a transformer that is supposed to serve 1000 houses is serving 3000 or more ),,,and why they cannot pay for meters for free.


It's like the school I went to for primary and secondary school. For primary school, I went to a school that was private meaning we paid fees that were King's ransom at the time. In return we got desks, books, pencils, biros, etc, from the school. We did not need to buy (I can only recall buying once, but that was because the school's usual supplier had been delayed)

Then I went to a government secondary school. Cheap, eh? Very cheap. And I also had to by exercise books, a desk, a chair, and pay for my uniforms.....

See my last two paragraphs, and then see the comment you made about transformers and meters.

There is nothing like cheap electricity. Somehow, money must be made to pay for power.

Burob:
I agree, mother of all strikes will occur in Nigeria, lack of societal discipline.

The Federal Republic of Nigeria was created to be a dysfunctional society.

See how they made useless this privatization of he electricity sector, remember that morning in November 2013, when President Jonathan was handing over certificates to those quacks.

People like you who look at the truth and decide to shifts still remains a problem. The electricity sector is still frustrated by the federal government through TCN with poor transmitting capacity and not the privatized generation and distribution companies.

erico2k2:
You have no idea have you? check my profile very well, I am a fluid Engineer and has worked extensively in the Nigeria power sector based in the Uk but go round the world with ABBA, I have done stuff in Sapele ,Ughelli, Benin etcLet me tell you, the biggest scam is in the power sector not NNPC, the quicker you guys realize this the quicker you come to up to date awareness or else Nigerians are fvct literally.

Read this
https://businessday.ng/lead-story/article/discos-plan-to-buy-power-from-gencos-hits-hurdles/

Electricity sector operators are negotiating bilateral contracts to enable power purchase agreements in the contract market phase set to begin in July, and parties to these negotiations tell BusinessDay that there are knotty issues.
Some of the highly indebted distribution companies (DisCos) have not made adequate investments in their networks including installing meters in their substations to capture the amount of electricity they receive. Also, the Transmission Company of Nigeria (TCN) lacks the capacity to wheel all the contracted power, making agreements difficult to reach.
The Nigerian Electricity Regulatory Commission had planned to move the electricity market into a full Transitional Electricity Market (TEM) Phase, which is the intermediary step between an integrated total utility and a fully competitive market structure with more varied market players, structured to bring competition into the market.
Read also: DisCos report N188 bn revenue in Q2 2022, lowest in four quarters
After TEM, a multiple buyer model is supposed to follow and this allows customers and DisCos to buy electricity through bilateral contracts with the bulk trader, in addition to buying directly from generation companies (GenCos) and independent power producers.
In the electricity value chain, the government is the wholesaler. GenCos are producers, while DisCos are retailers. Bilateral arrangements are meant to remove the wholesalers in the value chain and allow the retailers and producers to interact directly and freely, analysts say.
This was supposed to have happened in July 2022 but the market was not ready. Now it seemed ready to kick off, with implications for customers, both residential and industrial.
“This will translate to consumers having more hours of electricity available, which might impact the price they are currently paying. The cost of a kilowatt per hour will increase,” said Habu Sadik, a financial analyst and energy sector expert.
Sadik said the bilateral stage will be brutal and effective. “A DisCo can use any method possible to recover their money because failure to do that will put them out of business.”
It would also open up the sector as DisCos would find value in delivering better supply to customers with the ability to pay including estates and companies.
Three DisCos – Eko Electricity Distribution Company, Ikeja Electric, and Abuja Electricity Distribution Company – have recently been instructed by NERC, the regulator, regarding the implementation of bilateral contracts with GenCos.
These negotiations are contending with inefficiencies that have been glossed over in the electricity sector for a long time, according to some parties who did not want to be mentioned as they are not authorised to disclose the negotiations.
The existing contracts in the Nigerian energy supply industry see the Nigerian Bulk Electricity Trading Plc (NBET), the manager and administrator of the electricity pool in the industry, buy energy and capacity from 26 generation plants owned by the respective GenCos that have contracts with NBET.
Some GenCos have power purchase agreements; others have interim agreements executed pending formalisation on power purchase agreements (PPAs). The electricity purchased by NBET through PPAs are resold to DisCos through vesting contracts and transported on a physical network that forms the electricity value chain. Other contractual arrangements include gas supply agreements, gas transportation agreements, and grid connection agreements.
One key challenge is developing a mechanism for the conversion of vesting contracts into bilateral agreements between GenCos and DisCos.
The process for such migration or procurement is a crucial factor that needs to be managed within such a framework, experts say.
For these contracts to work and the market to be liquid, DisCos must be credible off-takers and other parties must be credit-worthy.
This has not been the case in the sector. Market collections by DisCos have been largely inefficient. The total revenue collected by all DisCos in the fourth quarter of 2022 was N243.65 billion out of N332.28 billion billed to customers, translating into a collection efficiency of 73.33, according to the regulator’s
latest report.
Under the bilateral agreement, DisCos have to fully collect for the value of the energy it received, so a sticking point is who settles the differential since NBET would no longer provide a guarantee.
In the interim, the Nigerian government has set a N5 billion Gas Stabilisation Fund to guarantee gas supplies to the power sector but it’s yet to make a difference. GenCos have been unable to ramp up generation as gas companies demand upfront payment due to an inability to settle previous debts.
Another sticking point is acceptable tariffs that would guarantee commercial returns. NERC is required to recognise any bilateral rates that are agreed upon when a DisCo chooses to purchase electricity from a GenCo or an independent power producer, provided that the procurement process is conducted prudently, even when the agreed prices are higher than the MYTO benchmark price for generation.
The challenge is some operators cannot justify the basis for the tariff they are proposing. According to MYTO rules, operators must show evidence of investment into the network before making claims and the regulator must be satisfied that the costs were indeed inputs towards the service. In this vein, the NERC would not recognise N50 million executive car purchase as part of expenses that would be factored into tariff computation.
Some of the inefficiencies covered up because the NBET was around are now getting enough sunlight and causing disagreements. The TCN, for example, claims to have the capacity to wheel over 7,000MW of power generated daily but in reality cannot wheel more than 4,500MW without the grid collapsing and would be required to repay other operators if it failed to wheel all the energy generated.
After the Partial Activation exercise, which was overseen by NERC and the NBET with the goal that at least 5000MW of power was generated, paid for in full, and successfully delivered to consumers daily with effect from July 1, 2022, failed, the bilateral power contract has come into play.
One key benefit of this phase, according to energy lawyers at Oake Legal, is that it will enshrine market discipline among the industry operators through the mechanism of liquidated damages for breach of service level obligations.

And in return, read the PwC report, and you would understand why

It's called solving the liquidity crunch in the power sector.

I freely admit I don't know everything, but I know that....profits must be made for a business to run well.

Good morning again. Enjoy your day.

(FIN).

nairalanda1:
And in return, read the PwC report, and you would understand why

It's called solving the liquidity crunch in the power sector.

I freely admit I don't know everything, but I know that....profits must be made for a business to run well.

Good morning again. Enjoy your day.

(FIN).

Profits without adding value is SCAM

money121:
But improve for my area
At least 18 to 20hrs electricity sure for my side
I don't know about urs ooo

18 to 20hrs and you are proud about it?


When small countries like Ghana and Ivory coast, are having 24hrs Monday to Sunday, January to December, year to year.

We too dey settle for less in this country, and is one of the problem affecting the development of this country.

When our leaders do 5% of there responsibility, we start to praise them, as if they are not supposed to do it or they are using their own money to do it!

Gboss247:
The transmission sector handled by FG still remains the bottleneck in the power industry, then TCN capacity is 7,100MW for a generation of 13,000MW and it is what is transmitted that can be distributed.

Good one I agree with you 100%, this is why I believe the TCM and DISCos should have been one entity, so they get involved and put their money where their mouth is.

PRIVACURRUPTION

..which is why they cannot afford to replace ailing transformers (although transformers break down easily because poor planning of cities means a transformer that is supposed to serve 1000 houses is serving 3000 or more ),,,and why they cannot pay for meters for free.[/quote]Whose fault is that? Is an excuse for their failure? Didn't they do a survey to see the reality of all these things and plan for solution to address them before sealing the deal to purchase.? They can't pay for prepared meters but they comfortable and capable of giving exstimated crazy bills to consumers for electricity they did not use. These excused do not hold water.