POWER Generation Companies of Nigeria (GenCos), at the weekend, vowed to declare force majeure on their operations if the Federal Government’s 0.75 per cent administrative charge is implemented.
Nigeria Bulk Electricity Trading (NBET), is a public liability company created by the Federal Government to incentivise private investment in power and act as the buffer to the GenCos.
But it was however, discovered that the thermal GenCos are not making pro-rata payments of 15 per cent of the gas invoice to gas suppliers and transporters and so decided to take over the payment through the compulsory 0.7per cent per cent charge.
Speaking to newsmen, in Abuja, the Executive Secretary of Association of Power Generation Companies (APGC), Dr Joy Ogaji, said that if the thermal GenCos should comply with the directive, some of them would fold up.
“On September 13, 2019 Nigerian Bulk Electricity Trading (NBET) issued a letter to individual thermal GenCos directing them to obtain, as a matter of urgency, their respective board approvals or resolutions, bequeathing responsibility for payment of gas and transportation to the respective supply companies for an administrative charge of 0.75 per cent.
“Given that a thermal GenCo’s’gas bill is between 50 per cent and 70 per cent of their total monthly revenue, depending on their efficiency and tariff, the implications of carrying out NBET’s directive of pro-rata payments is that a thermal GenCo with about 60 per cent of its total revenue as gas cost, will be left with about 6 per cent [15%- (0.6*15%)] of such total energy invoice to operate the power plant!
This is because of the 15 per cent received from the market, about 9 per cent must be allocated to gas as pro-rata payment. This is certainly not sustainable” she said.
Ogaji argued that if NBET gets away with the directive, it would make N2.7 billion for just collecting and submitting invoice to Central Bank of Nigeria (CBN).