GenCos threatens to shutdown power generation supply


The Power Generation Companies (GenCos) ave threatened to shut down
power generation supply if pressing issues in the sector are not
The GenCos spoke through the Executive Secretary, Association of Power
Generation Companies (APGC), Dr Joy Ogaji at a news conference in
Abuja on Sunday.
Ms Ogaji explained that the main reason for considering to take such
action was due to the inability of Nigerian Bulk Electricity Trading
Company (NBET) to honour agreement it had with GenCos.
She said GenCos were facing liquidity challenge due to NBET’s breach
of the Power Purchase Agreement (PPA) terms of 100 per cent payment
for power generated and supplied.
It is licensed and regulated by the Nigerian Electricity Regulatory
Commission (NERC) to undertake bulk purchase and resale of electricity
in the Transitional Electricity Market.
Ms Ogaji accused NBET’s management of constituting itself as “the
Alpha and Omega” authority that has the capacity to make or mar
generation businesses in the country.
According to her, the situation is so bad that to remain in business
and provide power to Nigerians, GenCos have to plead, lobby, and beg
to be paid for power generated and utilised.
“NBET has now reduced its role to blackmailing and threatening GenCos
investors and chairmen who have refused to concede to NBET’s illegal
demand of a 0.75 per cent charge on invoices paid to gas suppliers.
“NBET has clearly threatened not to release payments due GenCos until
they accede to NBET’s request, urging them to agree for a quid pro quo
with the 0.75 per cent administrative charge.
“The situation is truly grave and completely unprecedented as NBET has
completely shed its role as a licencee of the industry and has taken
on some sort of regulatory role.
“This singular action by NBET may lead to shutdown of power supply by
GenCos, who have unanimously agreed to call the bluff of NBET.
“GenCos have, in addition to the mounting debts being owed, working
under the harsh, unprofessional and unethical dealings from the NBET
management staff.
“GenCos Chief Executives and other key staff all have a bucket full of
tales of abuses, insults, aggression, nonchalance, non-responsiveness,
bullish, belittling, and ostracising actions
“All these are geared towards intimidating the GenCos and keeping them
at bay from seeking legitimate clarifications,” she said.
The executive secretary said the matter had been reported to the
Nigerian Electricity Regulatory Commission (NERC) and other high
authorities but yet nothing had been done.
She called on the federal government through the board Chairman of
NBET to review the professional conduct of the management of NBET and
ensure that business etiquettes were instilled.
“In a nascent market as ours, there are processes entrenched in the
Market Rules and other applicable Codes that should be followed in
dealing with sectorial issues at all times.
“This is in order not to leave room for arbitrariness, duress or undue
“The Power Purchase Agreement (PPA) clearly delineates the terms of
the business relationship and expectations of the parties.
“NBET was designed to help smoothen these relationships, removing
frictions which may exist between Gencos and DisCos.
“NBET was envisaged to occupy the space between GenCos and DISCOs,
acting as a “shock absorber” in times of market turbulence and not to
make it worse. “
Ms Ogaji said there was N600 billion the Federal Government needed to
pay GenCos through the Central Bank of Nigeria (CBN).
She said that if that money was not released on time, it was likely to
contribute to the shut down of power generation in the country soon.

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