Uncertainty over Electricity Output as NGC Threatens to Cut Gas Supply to Gencos

• We don’t need to meet at nights to ask for N1tn debt, operators reply Fashola

Chineme Okafor in Abuja
Nationwide electricity supply may be threatened by recent disclosures that the Nigerian Gas Processing and Transportation Company Limited (NGPTC) which is a subsidiary of Nigerian National Petroleum Corporation (NNPC) has written to gas-based power generation companies (Gencos) in the country threatening to cut off gas supplies to them if they don’t make their contracts effective.

THISDAY gathered this from the umbrella body of the Gencos – Association of Power Generation Companies (APGC) yesterday in Abuja.

APGC explained that by that request, the NGPTC simply wants them to pay their monthly gas bills on time and further guarantee future supplies to them through Letters of Credit (LC).
APGC’s Executive Secretary, Dr. Joy Ogaji, told THISDAY in a telephone interview that the letters were already on the tables of the Gencos.

Ogaji also debunked claims from the federal government that the Gencos might be playing politics with their recent lawsuit against it (government) or even making attempts to sabotage the country by shutting down their operations.
She stated that contrary to the government’s allegation that it had security reports that claimed they were meeting at nights to perfect plans to sabotage it, the Gencos do not need to convene night meetings to ask for monies owed them by the power market to be paid.

“I don’t know if you know that the NGPTC has sent letters to all the Gencos that use gas, threatening that if they don’t come and make their contracts effective, they will cut them off, and you understand the meaning of effectiveness of contract.

“For us to make our contracts effective, NBET need to post us bank guarantees, and NBET says the Discos have not posted to them. So, where do they expect the Gencos to get the LCs and post to them,” Ogaji asked.
She explained that NGPTC’s demands for an effective contract was more than just meeting their monthly gas bills.
According to her, “At this stage, it is a conundrum. On the right hand side we are asking to be paid, and on the left, we have letters threatening us to make our contract effective.

“By making it effective, it means I will be paying promptly and putting a bank guarantee that any bill I don’t pay will be drawn down, and where do we get the money from when the market is owing us heavily? If they shut us down, the country is down.”

When asked if the Gencos were actually meeting at nights to perfect plans to shut down their operations and plunge the country into darkness as claimed recently in Uyo, the capital of Akwa Ibom State, by the Minister of Power, Works and Housing, Mr. Babatunde Fashola, she said nothing of such happened.
“Night meeting? When is night? Because I leave my office by 7p.m, so when is night? But, none to the best of my knowledge, and as you know, the owners of the Gencos are very busy people who will not leave their sleeps and meet at nights, for what?

“There is no such nocturnal meetings. Recall that this same nocturnal meeting was claimed when the CEO of Egbin late last year requested for payment. Each time the Gencos request for payments, there will be claims that we are meeting at night,” she stated.
Ogaji further noted: “Do we need to meet at nights to state that we don’t have money to pay for gas, do we need to meet at night to tell the international community – because power is an international commodity and the government need to understand that?

“For the records, Gencos don’t need to meet at nights to be able to state the fact they are being owed over N1 trillion. Gencos don’t need to meet at night to state the fact that the Centre Bank of Nigeria (CBN) is currently telling the commercial banks to classify power sector loans and you know what it means when a loan is classified.
“These are some of the reasons why the Gencos which everybody thought were seemingly sleeping had woken up because all their sources of survival are shrinking. They were taking loans to buy gas to generate and put on the national grid, now those loans have been classified.

“The role of a Genco is to generate power, which is our business. If Gencos cannot generate today, it is not because we want to hold the country to ransom, or that we are politically motivated. We are not holding any nocturnal meetings and we don’t need to do that to tell the world about our challenges.”