The Minister of Power, Joseph Tegbe, has said the Federal Government can no longer continue to cover electricity tariff shortfalls indefinitely while striving to provide stable power supply across the country.
Tegbe made this known at an energy conference organised by the Harvard Business School Association of Nigeria, where stakeholders discussed challenges affecting the nation’s electricity sector and possible solutions.
The minister identified poor revenue collection, inadequate metering, mounting debts owed to power generation companies and weaknesses in the electricity market structure as major factors contributing to the sector’s persistent challenges.
He stressed that electricity suppliers must be able to recover their operational costs for the sector to remain financially sustainable, noting that commercially viable tariffs would make little difference if payments were not collected.
Tegbe also disclosed that the Federal Government was working with the Nigerian Electricity Regulatory Commission (NERC) to review electricity tariffs and reform the market structure. He questioned the continued relevance of the Nigerian Bulk Electricity Trading (NBET) model, which purchases electricity in bulk and resells it to distribution companies.
According to him, the government intends to move towards bilateral electricity agreements, which would allow power producers to supply electricity based on commercial arrangements that link supply more directly to payment.
“We can’t keep covering tariff shortfalls and think we’ll give power to every Nigerian,” the minister said, emphasising the need for lasting reforms to improve the financial stability and efficiency of the electricity sector.
