Power: Why private operators cannot compete with PHCN – BPE boss

Power: Why private operators cannot compete with PHCN – BPE boss

News Nov 8, 2010 By Oscarline Onwuemenyi
ABUJA—The Director General of the Bureau of Public Enterprises, BPE, Ms. Bolanle Onagoruwa, has explained that due to the structure of the electricity industry, it is not possible for private operators to build their distribution facilities to compete with the extant distribution network of Power Holding Company of Nigeria, PHCN. She made the remarks at an in-house workshop on power sector reforms held last week at BPE’s headquarters in Abuja .
According to her, the technology in power generation allows for many participants unlike the technology for transmission and distribution networks.
“One can set up separate generating plants using any fuel source (hydro, gas, coal, etc) that is economically viable. At any point, you can have many players.
“Transmission network is such that it is a natural monopoly given that you cannot ask every operator to build its own transmission network. It is uneconomic, not sensible and it has not been done anywhere in the world,” she added.
The Nigeria Union of Electricity Employees, NUEE, had argued that “if the government is really serious about the sector, it should allow the 25 licensed companies to operate alongside PHCN, like the Nigeria Electricity Supply Company, NESCO.
NESCO has been operating in Nigeria since 1929, generating its own electricity without taking over PHCN.”
Onagoruwa pointed out that the design of the Nigerian Electricity Supply Industry, NESI, is such the Transmission Service Provider, TSP, should give equal access to generators in accordance with laid down rules.