Decentralizing the Business of Electricity

How will true federalism resolve the epileptic electricity problem in Nigeria?

There are over thirty communities in the Niger Delta area of Nigeria with 24/7 power supply! Some of these communities have had it like this for over two decades and in most cases (if not all), the electricity is free! Yes, in this same Nigeria. Do you wish to know the secret behind this success? Well, this is what our lecture is all about today.

Surprisingly, none of these Niger Delta communities are connected to the national grid nor a centralized grid system. In other words, the only reason these communities are able to enjoy 24/7 power supply is simply because they are not connected to the national grid. The federal government is not in charge of their electricity supply! They are connected to what we call a decentralized electricity system. The same model we believe comes with true federalism which we now advocate that Nigeria should adopt.

It might interest we all to know that within the past decade, the federal government of Nigeria has spent over $20 billion trying to fix power, yet what we get is more darkness. Will it not be stupid of us to continue doing the same thing when we have an alternative choice?

What then is exactly wrong with the Nigerian electricity arrangement?

First, under the present skewed unitary system, the federal government has absolute control over power generation and distribution  (it has recently given up some powers on generation but still holds distribution), this makes it difficult for state governments to have full control over the sector. The present arrangement allows states to generate but forbids them from distributing what has been generated without first supplying the national grid. In other words, the federal government through its control partners (Discos, Gencos, etc) decides how electricity should be allocated to locations without the states having an input. Wrong system.

Second, because the state governments have no control over this process, their states only get what is allocated without them having a say in the arrangement. Wrong system. Why should the federal government be in charge of a critical but basic need like electricity? Why can’t my state and city have the right to generate and distribute electricity within and giving us steady power and without supplying to the national grid?

The reason why we do not have regular electricity in Nigeria is not because of corruption but because of the unitary national grid system. The national grid is expensive to build and expensive to maintain, therefore making the entire business of power generation and distribution unprofitable. It is an unnecessary wasteful way to solve our electricity problem. With the present unitary national grid system, we might never have regular electricity even if we pump in $2billion into the sector yearly.

There are more than twelve states that we are sure of that can have regular supply of electricity once we put an end to the national grid system. Lagos state for example has the resources, manpower and whatever to give Lagosians 24/7 power supply. The reason why it cannot do it is because the constitution (federal government) will not let it do it. The best Lagos can do is supply electricity to public infrastructures. This is a crazy system. Rivers, Akwa Ibom, Anambra, Niger and many other states have the same potential yet they are restricted by the unitary arrangement.

If every Nigerian state had the autonomy to generate and distribute electricity since 1999, we are sure by now, we will have up to ten states celebrating 24/7 power supply. The reason why not even a single state can boast of 10/7 power supply is because the federal government is in charge. This must change.

If oil companies operating in the Niger Delta can give over 30 communities free uninterrupted power supply for over a decade, have you not wondered why Nigeria (FG) cannot give at least just one city (not state oh) uninterrupted power supply for just one month? Can’t you see that something is wrong with the Nigerian arrangement?

Nigerian Agip Oil Company (NAOC) supplies power to Omoku, Obrikom, Aboh, Beneku and Okpai communities, all in Delta state.  Nigeria Liquified Natural Gas Company (NLNG) supplies power to Bonny and Finima towns in Rivers State. These communities don’t pay for the electricity. It is supplied free of charge by the IOCs. And it has been like this for over a decade!

Why can’t the FG give just one city in Nigeria 24/7 power supply?

Again, we repeat, if these IOCs can comfortably power these host communities at ease and for free for years, why can’t NIGERIA power at least ONE major city in the whole of Nigeria, despite the charges? Why can’t just one major city be proud of having 20/7 power supply in Nigeria?

Can’t we all see that something is fundamentally wrong with Nigeria?

If electricity generation and distribution was strictly a state government affair and there is no such thing as a national grid and federal control, by now, at least ten states of Nigeria would have been celebrating at least fifteen hours of uninterrupted power supply per day and many more states would have been warming up to join the list. Competition!

Today we have a centralized electricity generation and distribution system. We have a national grid. We have a situation where if a gas pipeline is blown up in Bayelsa, electricity goes off in Kano and Lagos states. We have a situation where a court is deciding for investors how much they should charge Nigerians for electricity supply.

Because of overcentralization, the electricity generation and distribution business is now so complex that we do not even know who to blame for lack of electricity in our cities. It is shameful that despite the numerous power plants we have in Nigeria, we do not yet have a single city that can boast of twenty hours of uninterrupted power per day. Just one city! The most annoying part is that the electricity business is now so complex that it is almost practically and impossible to decentralize the sector without running into technical and legal problems. From generation to distribution to gas supply to regulated rates, and you name. There is one body or the other claiming regulatory rights.

This unitary overcentralized system of doing things in Nigeria has killed almost every sector of the country and it js time for us to speak against it.

Electricity generation and distributiom is not rocket science. The IOCs are doing it in the Niger Delta. Electricity generation and distribution licenses and issues should be a state government affair. States should be allowed to explore their natural comparative advantage so to provide power to their people.

Federal Government should have no business with electricity anymore. National grid should be discarded. Competition should be introduced. States and cities should be allowed to generate and distribute their own electricity and bear the risks.

Surprisingly, Babatunde Fashola and Rotimi Amaechi who were once championing this cause of decentralization of electricity are now at Abuja and in the right ministry and yet they have all gone dumb. Maybe their hands are now tied by the unitary philosophy of ‘One Nigeria One Electricity’

How can a city in a country like Nigeria and in this 21st century not have electricity for a whole week?

What is wrong with Nigeria and how can we help to solve the problem?

Let us hear your views and inputs?