PHCN ‘asks’ gencos to generate less electricity

Transcorp Ughelli Power Plc (Transcorp Power) has alleged that the Power Holding Corporation of Nigeria (PHCN) sometimes asks electricity generating companies (gencos) to generate less electricity for Nigerians.

The genco, which is a subsidiary of Transnational Corporation of Nigeria Plc (Transcorp), said the PHCN, through its National Control Centre (NCC), often gives these directives due to the inability to transmit the power generated.

“(For) Transcorp Power Ughelli plant, about 35 to 40 percent of available capacity of the plant has been lost in the current year as a result of 3rd parties actions such as gas outages/quality and incessant instructions from the National Control Centre to reduce load due to inability of transmission to wheel the power,” it said.

Speaking of the challenges generating and distribution companies were facing, hindering optimum production, Transcorp said less than half of its generated power was rejected by NCC.

“NCC has begun issuing regular directives to GENCOs and DISCOs decreasing the amount of power that is generated and sent out.

“Last quarter when lack of gas supply meant that, Transcorp Power had available 650MW, NCC rejected more than half of that; and DISCOs were ordered to go as low as 200MW”.

The GENCO further blamed inflation, foreign exchange policies, gas prices and delayed payment for its challenges.

“Since privatization there has been delayed and sometimes partial payment for the electricity generated. This has led to the industry owing Transcorp Power about N25 billion. Other GENCOS are also owed.

“In the lack of a cost reflective tariff that would most ideally generate revenue for the power generated, as tariff of generating companies have not been reviewed since May 2014 despite the major cost component that drives the tariff such as forex rate, inflation and gas prices has increased significantly since the last review.

“Lack of predictability as the activation of contractual agreements such as the power purchase agreement which is a key ingredient is yet to be effected, thereby creating uncertainty in the market in relation to cash flow planning and investments.”

The debates for increase in tariff for industrial and commercial purposes are still on going.