See why electricity tariff may remain high – NDPHC MD

In view of the variables that attend power generation and distribution, there are indications that electricity tariff may not be as cheap as many Nigerians want.

The Managing Director of Niger Delta Power Holding Company, Chinedu Ugbo was speaking after an inspection of Olorunsogo Power Plant in Ogun State.

Ugbo who was reacting to complaints about increase in electricity tariff said the consumers should take into consideration cost associated with distribution, transmission and generation along the value chain.

“Electricity is a commodity and it has cost associated with its distribution, transmission and generation along the value chain. Money does not come from any other source apart from that end user tariff and the end user tariff must cover that cost”, Ugbo said.

“Gas cost forms about 70 per cent of every investment we have. So whatever tariff is agreed between the distribution company and the Nigeria Electric Regulatory Commission (NERC) must have taken into consideration the cost of gas across the value chain”.

“We are also looking for ways to evacuate electricity from our substations to end users and we know Lagos is one of the most populated cities. We want to take electricity there and we also know the demand is higher in Lagos”.

The Managing Director that added that the NDPHC and Ibadan Distribution Company have a working arrangement, such that Ibadan DISCO would have increased power supply to be able to distribute to more industrial clusters and residential customers within its area of operation.

“We are looking at working together what we call a bilateral arrangement under contract that we see us supplying the electricity to them while they distribute to industries, clusters and residential customers essentially to see how we can use this asset to the benefit of Nigerians”.

“We have a number of industries at the Shagamu interchange, but there is no connection from this power plant to that axis, so we are looking at developing a transmission line from the power plant here to the interchange for the companies there and it would encourage other companies to come into that industrial cluster.

“We are closing the loop between here and the Papalanto transmission substation and to the existing transmission line that goes from Papalanto to Ota. The lines were built by NDPHC. We also have what we call the new Abeokuta substation which is a 2 by 60 MVA substation”.

Ugbo said the company is looking at connecting the Olorunsogo plant to the sub-station at Papalanto.