NASS To Quiz Power Minister, Barth Nnaji and NERC Chairman, Sam Amadi

Power Minister, Prof Barth Nnaji

Today, the House of Representatives announced it will summon the Honorable Federal Minister of Power, Prof Barth Nnaji and the Chairman, Nigeria Electricity Regulatory Commission [NERC], Sam Amadi to appear before the House Committee on Power to explain the rationale behind the planned increase in the electricity tariff. According to information available to, both men were summoned today.

As gathered, the House committee on Power reached the decision to summon the power Minister and the NERC chairman following a motion moved by Yakub Balogun [ACN, Lagos] citing a planned increase in electricity tariff. As Hon. Yakub Balogun explained, the increase in electricity will cause “untold hardship on consumers in Nigeria” The Speaker of the House of Representative, Hon. Aminu Tambuwal agreed that there was a need to invite the minister and the chairman to the house committee on power to brief them on why the increase in electricity tariff.

Official reports indicate that the electricity tariff is scheduled to increase starting from June1, 2012. The chairman of NERC, in a recent public address to private investors reechoed the need for the tariffs to be adjusted to accommodate the increased cost of producing electricity in present day Nigeria.

Sources within the National Assembly [NASS] tell our correspondent that the invitation sought by the Action Congress of Nigeria [CAN] legislator from Lagos State, Hon Balogun may have not been in true faith. It is understood that the invitation is laced in political undertones tuned a possible macabre dance. The lawmaker is said to be in preps to attempt to soil the “clean integrity” of the Power Minister and the Chairman as they face the house committee on power. “Their target is the President’s agenda on power”, said the source who serves as an aide to one of the North East legislators.

Independent inquiry by into the pending increase in electricity tariff revealed the power generation in Nigeria has been in the ‘red’ for a longtime. Power has been generated at a huge financial lose to the country. Official figures show that the Power Holding Company of Nigeria [PHCN] generated monthly revenue [through electricity tariffs] of N14billion to N18billion.

In December of 2011, it recorded a high of N18billion but in January of 2012 it recorded a low of N14billion owing partially to the oil subsidy strikes and internal transfer of workers from within the PHCN to other place – resulting to an internal strike at the PHCN.

At peak performance, PHCN generates monthly revenue of N18billion. But an official source within the Ministry revealed to that PHCN “cannot meet her obligations” even at sustained peak performance. “PHCN needs to generate a minimum N22.5billion monthly to break even”. Presently, the PHCN owes debts to energy companies that will require repayment.

A few of the companies which the PHCN owes include –

  1. Shell – $78million
  2. AGIP – N50billion
  3. Nigeria Gas Company [subsidiary of NNPC] – N10billion
  4. Niger Delta Power Holding Company – N6billion
  5. Ibom Power – N300million

The debt profile is reported to be on a steady increase according to experts at the Ministry of Power. They indicate that the debt will continue to increase until the monthly revenue is increased through either hiking the electricity tariff or clogging the uncontrolled loss in revenue to recipients of electric power without a metering device. It is estimate that the PHCN loses over 40% of its revenue to non-metered electric supply.

Acting on consultative capacity, the Ministry of Power detailed to the NERC chairman of the numbers involved in the production of electricity. It is gathered that the Power Ministry does not have the constitutional powers to increase electricity tariff –according to the 2005 Power Reform Act. The power rests with the NERC which operates as an independent entity. The Chairman is appointed by the Presidency along with the 5 Commissioners of the NERC which are selected from the various geo-political zones.

The invitation to the house committee on power may not serve the two men the opportunity to express themselves – as to the need to revise the tariff charges. His is because of the growing frustration within the residents of Nigeria who is yet to see the transformation of the power sector in real terms. It is believed that the opposition within the NASS are cognizant of the frustration – and so would pander to the frustration when the two men show up.



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