The Federal Government will no longer pay for unused electricity.

According to the Chairman of the Nigerian Electricity Regulatory Commission (NERC), Sanusi Garba, the Federal Government will cease paying for unused electricity in the near future.

Garba told reporters in Abuja that the technical issues surrounding the N1.6 trillion debt, for which electricity generating companies (GenCos) are demanding payment, were the source of the difficulties encountered.

He appeared to be accusing GenCos of not having the capacity to deliver when he stated that “signing agreements for generation plants for capacity that has not been delivered will be reckless.”

Why is Nigeria paying for capacity that has not been useful to Nigerians, he wondered, when “the infrastructure” that should have been provided by the firms “is not there?” he added.
Additionally, NERC Vice-Chairman, Musiliu Oseni, provided insight into the national grid failure that occurred on Monday and Tuesday. 330 Kilovolts (kV) transmission line along the Benin-Edo State axis, according to Oseni, was damaged when a conductor snapped, he said. The problem, on the other hand, was said to have been resolved yesterday.

Garba noted that some of the GenCos do not have an effective contract for the payment of unused electricity, and stated that “if a generation company has an effective Power Purchase Agreement (PPA) that provides for the payment of a certain level of capacity, then there is an obligation to pay.” Garba also stated that

In contrast, several power generation companies do not have an effective contract that guarantees payment for so-called unused capacity.

“The good news is that we are gradually moving toward a point where generation plants will receive capacity payments that will be delivered somewhere and somehow along the value chain,” says the author.