New Electricity Market Regime Begins as A’Ibom Floats Own Disco after Enugu

Peter Uzoho

Leveraging on its power under the new Electricity Act 2023, Akwa Ibom State has incorporated its own power Distribution Company (Disco) called ‘Ibom Utility’, with the mandate to purchase and distribute electricity across the state.

With this coming after the establishment of a state power distributor in Enugu State last week, it means two sub-nationals now have their own Discos as the Nigerian Electricity Supply Industry (NESI) witnesses new market regime to be driven by bilateral trading and cost-reflective tariff era.

A top source at Ibom Power, one of the first Independent Power Plants (IPPs) in the country, revealed the establishment of Ibom Utility during an exclusive chat with THISDAY.

He said the new Disco would now compete with the Port Harcourt Distribution Company (PHDC), which currently supplies power to Akwa Ibom, Rivers Cross Rivers and Bayelsa.

“What the new Electricity Act has done for us is giving us the opportunity to sell our power to other Discos. Because one of the challenges we have is that the distribution company, sometimes, does not take sufficient load. So, with the new Electricity Act, Akwa Ibom State has incorporated a distribution company. It’s called Ibom Utility.

“So, now, if PHDC, which is the company that has the license to distribute in this region right now, fails to take the load, the state company can work towards taking the load”, he said.

He said the new Electricity Act has also enabled Ibom Power, which has available generation capacity of about 150 megawatts, to have bilateral agreement with other nearby Discos like Edo, Ibadan and Eko, to offtake its power.

This, he explained, would enable the power generating company to have multiple strings of income based on the bilateral agreement with the Discos.

He, however, allayed any fear of potential dispute between the existing Discos and the now burgeoning state-owned distributors over ownership of franchise area.

He explained, “No, there won’t be dispute between the new state owned Discos and the existing private Discos. For instance, PHDC owns all the physical power distribution infrastructure in this area because they are the only licensee to operate within the region of Bayelsa, Akwa Ibom and Cross River before this Act was introduced.

“So if the state government begins to run its own Disco, the possibility is that they might begin to build their own network. There can’t be an ownership dispute because the owner of the infrastructure is there which is PHDC. Even though Akwa Ibom State government has installed over 500 transformers, but the state government did those things as a social investment, there was no contractual obligation.”