The truth about Power transformation. By Babatunde raji Fashola.

Let me start by acknowledging the decision of Mr. President to appoint a Permanent Secretary from the private sector to the Power Ministry in the person of Mr. Louis Edozein.
I am happy to say that of all the people I have spoken to over the last few days who claim to know him, nobody has a bad word to say about him.
I will need his vast knowledge in the industry to guide our choices and decisions.
Let me also acknowledge the work that the Vice President and his Power Advisory team have done in advance of our arrival to bring increased transparency to this sector by the daily report of the performance of power installations nationwide which I have found most helpful in getting information about what is happening and where. This is also Change in the way things are done
As far as status reports go, it is important that Nigerians must understand where we are, what our role is, and what to expect of us.
Until around November 2013 the Government was the owner of all power assets in Nigeria except a few independent power plants and other smaller assets.
This control was exercised through the Power Holding Company (PHCN) which (a) produced the power – generation; (b) transported the power – transmission; and (c) sold the power to consumers – distribution.
This has changed with the implementation of the Electricity Power Sector Reform Act of 2005.
What this means is that our Government policy like in the Telecoms sector and the Mass Media, has also changed in the power sector, from Government operated to private sector operated and government enabled.
Today, private companies have the responsibility for generation.
Virtually all the generation on the national grid is produced by 6 (six) of the companies, which were previously Government owned, 2 (two) international oil companies (Shell and Agip), and a company owned by the Federal, State and Local Governments (The Niger Delta Power Holding Company, NDPHC), whose generation assets are in the process of being sold to private investors. These companies are the ones called the generation companies of Gencos for short.
There is 1 (one) company owned by Government, under a management contract with Manitoba of Canada and it is solely responsible for transporting all the power. It is called Transmission Company of Nigeria or TCN for short.
11 (Eleven) distribution companies are now responsible for bringing power to your homes. They are the distribution companies known as Discos for short.
They must buy the power from the Gencos, who must buy gas from the gas companies in order to produce power; they must then pay TCN to carry it to their substations, and distribute to the houses in their distribution areas; and this is where the tariff issue comes in.
Power is a product, manufactured by raw material inputs of labour, gas and financed by banks loans with interests. To transport it, the TCN much charge for it; and the price is added to the cost of power which the Discos buy.
This point is important to note because I will come back to it when I address the problems, especially tariff.
As we all know, we took a bold step like this with NITEL and sold licenses to telecommunication companies called Telcos. We did this is 2001 and today we have achieved significant telephone coverage even if some people cannot still afford a phone. That was 14 (fourteen) years ago.
I believe we would be in a better place if we had implemented the Electricity Reform Act in 2005 or shortly thereafter when it was passed.
But we sadly did not do so until 2013 when Former President Goodluck Jonathan took the bull by the horn and the privatization was finally completed, which means we lost 8 (eight) years, and we have progressed only for just about 2 (two) years, since the private companies took ownership.
Of course this change of policy which is welcome, comes with its own challenges, human resistance, suspicion, vested interests, learning new things and so on, and all of these are quite normal when things change. It is our responsibility to navigate and overcome theses challenges.
If it is any comfort, countries like Brazil, South Africa, India and Mexico, to mention a few, have passed this same road before and they are clearly better for it. It is now our turn to do so, and we must resolve to make a success of it. We can do by relying on our own recent experience.
Now let us think of where we were in 2003, two years after privatization of the telecoms sector and the coming of GSM. How many people could afford a telephone? Remember that we were all being billed per minute even if we spoke for only 10 seconds.
We complained that the tariff was high but today, per minute billing is now history, replaced by per second billing and all sorts of promo to give customers a choice.
One yeas after GSM came cities like Ibadan, Zamfara, Ebonyi, Bayelsa and Zaria were either not connected or struggling to be connected as we are with electricity today.
Nobody could do more than talk and text on the phone at the time. Today we send pictures, watch TV and movies on our phone and do banking and other businesses and the scope is still growing.
Some people have “ported” and changed their service providers, and we are all learning to conserve cost because our phones have meters, which are the timers that bill us as we use them; and we get disconnected when there is no credit.
Most importantly, many people have become employed selling recharge cards, telephones, working in call centres, maintaining towers for Telcos and so much more.
This is what will happen on a large scale, when (not if) we diligently pursue the privatization of power.
Today, we are at a point when government spending on all aspects of power has been significantly reduced on distribution and generation, except for some projects started under the National Integrated Power Project (NIPP).
The spending of government is now largely focused on transmission network and gas supply while Gencos and Discos focus on producing power and distributing it.
Government is now a regulator through the National Electricity Regulatory Commission (NERC), which is like the National Communication Commission (NCC), which regulates Telcos.
We intend to strengthen this part of our responsibility so that we can hold the Gencos and Discos to their contracts with citizens.
But before we do that, we must play our own role of providing gas and expanding the Transmission Network.
More importantly as a government and consumer of power through our ministries departments and agencies, we must show example at federal, state and local governments by paying up backlogs of power bills and ensuring from there that we pay for what we use.
Our ministry intends to champion this at the Federal Level and I hope that the State Governors, heads of parastatals, National and Sate Assemblies, the various State and Federal Courts, Local Governments, Military, police, and other related security agencies will find this a worthy undertaking to join and ensure payment of all their electricity bills
I cannot imagine any government today not paying for airtime for telephone use. The truth is that is we don’t pay that business will collapse.
-Mr. B. Fashola. Minister of Power. Telling the truth, and stating the facts. The truth cannot be hidden. Only the truth can set us free and gain our economy mileage.