EKEDC's George Etomi responds to FG's eligible customer declaration

The recent policy directive by the Federal Government declaring eligible customers in the power sector has stirred a wave of reactions from industry players. Under this regime, four classes of customers have been granted the legal right to directly engage with power generators. But what is the perspective of the distribution companies on this move? George Etomi, Director of the Eko Electricity Distribution Company, offered his insights on CNBC Africa. Etomi acknowledged the Minister's authority to declare eligible customers but emphasized the importance of timing. He highlighted the need for market parity, cost reflective tariffs, and elimination of distortions for effective competition to thrive. The concern lies in creating a level playing field to prevent unfair advantages for new entrants at the expense of existing sector participants. The implementation of the eligible customer declaration has not yet commenced, awaiting further directives. Etomi raised crucial points regarding the impact on different classes of customers. Those tapping power directly from the 132KV lines will now have the option to pay generators directly, bypassing distribution companies. This shift is poised to significantly affect the revenues and operations of affected discos. The decision raises questions about pricing mechanisms and market remittance. Adjustments in tariffs are deemed essential to maintain equilibrium and prevent disparities in costs imposed on distribution companies. The move is perceived as a crucial step in enhancing the electricity market's efficiency. The Federal Government's rationale behind the directive is multifaceted. Etomi highlighted the urgency to address power sector challenges, including issues with remittances and investment in generating and transmission capacity. The new customer classification aims to streamline revenue collection and enhance operational efficiency. The tariff structure remains a pivotal issue in the power sector, often entwined with political considerations. Etomi emphasized the significance of bold actions to tackle tariff challenges and attract much-needed investments. The proposed changes have potential implications for tariff adjustments and market dynamics. Regarding accusations of dishonesty leveled against distribution companies, Etomi clarified that systemic challenges inherited from the past contribute to the sector's complexities. He underscored the interdependence of sector players, highlighting the need for collaborative efforts to address underlying issues. The eligible customer declaration presents both opportunities and challenges for distribution companies. While some segments may face greater impacts than others, the overarching need for infrastructure enhancements and operational efficiency is paramount. The shift necessitates a reevaluation of business models and strategies to adapt to the evolving market landscape. Etomi addressed misconceptions about 'stranded power' and underscored the need for efficient power allocation and revenue optimization. He emphasized the importance of fostering healthy competition in the value chain to drive sustainable growth and deliver enhanced services to consumers. In conclusion, Etomi underscored the importance of continued collaboration among industry stakeholders to navigate the evolving power sector landscape. By fostering a conducive investment climate, addressing tariff challenges, and prioritizing operational efficiency, the sector can pave the way for sustainable growth and improved service delivery to Nigerians.