Minister of Power Joseph Tegbe has said the Federal Government can no longer afford to cover electricity tariff shortfalls while striving to provide power across the country.
Tegbe made this known at an energy conference organised by the Harvard Business School Association of Nigeria, where industry experts and regulators discussed challenges facing the power sector and possible solutions.
The minister said the government was working to address major problems in the electricity market, including poor revenue collection, inadequate metering, mounting debts owed to power generation companies (GenCos) and structural weaknesses in the market.
He identified the failure of operators across the electricity value chain to recover their operating costs as a major obstacle to achieving a stable power supply.
“Commercially viable pricing will work where the supplier can actually collect his money and get paid. There’s no sense in commercially viable pricing if you don’t collect money,” he said.
Tegbe also disclosed that the government was collaborating with the Nigerian Electricity Regulatory Commission (NERC) to review electricity tariff assumptions and reform the market structure.
He questioned the continued relevance of the Nigerian Bulk Electricity Trading (NBET) model, which purchases electricity in bulk and resells it to distribution companies (DisCos), arguing that the arrangement had failed to ensure full cost recovery.
According to the minister, NBET should have been phased out about five years ago, adding that his plan was to move away from the existing model.
“NBET ought to have been sunset about five years ago, and I’m telling you my own plan, at the end of the day, is to move from that model. That model will not help Nigeria. We can’t keep covering tariff shortfalls and think we’ll give power to every Nigerian,” Tegbe said.
