Mr. Peavey, Egbin Power Plant and the N125 Billion Debt

Mr. Peavey, Egbin Power Plant and the N125 Billion Debt

Monday, September 11, 2017 1:32 pm

Fashola: Minister works, power and housing.

By Raji Fashola

I am compelled to use this platform to respond to these allegations. Let me start by saying that Mr. Peavey

A few months ago, I had cause to respond to media reports suggesting that Nigeria was going to be plunged into darkness. Those reports were credited to one Mr. Dallas Monroe Peavey, Jnr, an employee of Egbin Power Plc, they were based on Mr. Peavey’s views that debts owed to power generation and distribution companies would lead to a collapse of the power system.

In my response, at the time, I believe I mentioned what Government was doing about verifying MDA debts and how to deal with legacy debts which we inherited. I also admonished all operators in the sector, to act in a manner consistent with their leadership role and the public expectation of all of us, to find solutions to problems, project hope, and not fear. I advised that we should all be factual in our public comments and refrain from being bombastic.

We must promote hope and not project fear to people who entrust us with the responsibility to solve their problems. It seems that Mr. Peavey did not hear me, or chose to ignore my admonition. Recently, a group of United States senators visited Nigeria and Egbin Plc where Mr. Peavey is employed. Media reports credited to Mr. Peavey on the back of this visit are to the effect that:

a. Mr. Peavey told the visiting senators that Government was owing them N125 Billion.

b. That Egbin Power Plant could not evacuate 700 MW of power because of TCN (Transmission Company of Nigeria) failure to provide the capacity to do so.

I am compelled to use this platform to respond to these allegations. Let me start by saying that Mr. Peavey did not tell his visitors how that N125 Billion was made up. He did not also tell them that MDA debts owed to Discos had been verified and instead of claims in excess of N90 Billion submitted as owed by the Federal Government, only about N27 Billion has been established by verification.

He did not tell his visitors that resolution of debts are topical views of our agenda at these monthly meetings and minutes of our discussions as recently as the last meeting in Kano on August 14th 2017 are kept.

He did not tell his visitors that Government has approved a payment assurance guarantee for all power produced to the grid and that some payments have been made and others are being processed as reported at the Kano meeting and the Abuja meeting in July 2017.

He did not tell his visitors that his company either knew of these debts when his employers bought the plant or failed to do the due diligence that will have disclosed it to them.

He also did not tell them that the Ministry of Finance has announced a programme to issue promissory notes for inherited debts subject to Parliamentary approval. It is true that there was a time in our recent past that only Americans would know if there was a problem in Nigeria. That time has passed.

So, we know that when Mr. Peavey told his visitors that his employers could not evacuate 700 MW from Egbin Power Plant, and blamed TCN he was lying at worst or at best was being bombastic.

We know because this Government is constantly working to maintain records, accurately and transparently in the power and other sectors.

Therefore, on the 2nd September 2017, around the time when the news was reported, Egbin’s peak power production was 344 MW (and the average power production was 336 MW). This is less than 50% of the 700 MW in the report credited to Mr. Peavey that his company could not evacuate. We know that Egbin has 6 (SIX) turbines of 220 MW each, with an installed capacity of 1,320 MW.

It was the first power plant I visited when I was appointed Minister. We know that 3 (THREE) turbines, ST 1, ST 5 and ST6 are not functional. ST 6 for undisclosed faults and ST 1 and ST 5 for maintenance. So Egbin Power Plc was not producing 700MW at the time.

What Mr Peavey should have told his visitors is that TCN’s wheeling capacity has exceeded over 6,500MW. These are also reported at our Monthly meetings.

As if these were not enough, my attention has been brought, to allegations to the effect that Mr. Peavey is inciting other GenCos to refuse to comply with grid codes and regulations made pursuant to the Electric Sector Power Reform Act of 2005 prescribing frequency levels of operation for power generating companies.

While we do not know why Mr. Peavey is acting contrary to our national interest, we also know that he has been in and out of Nigeria and came in on 17th August 2017 without a record of visa issuance on arrival.

I have directed that his matter be referred to the Immigration department for advice on his legal status vis-à-vis a valid visa and work permit. I expect that appropriate action will be taken.

Let me say to Mr. Peavey and other non-Nigerians that your partnership is welcome, your stay will be peaceful and your rights to free speech are guaranteed. But other laws must be respected because we will enforce them.

On another note, let me commend the Nigeria Electricity Regulatory Commission (NERC) for the issuance of regulations issued at our last meeting in Kano. It is beginning to bear the results of registration and licensing because the Vice-Chairman of NERC informed me that a solar-based mini grid facility will be commissioned in Kigbe community, Kwali Local Government, FCT Abuja today.

It is a 20 KW facility that will power 145 households and 5 businesses. The developer is Havenhill Synergy Ltd. I am also aware that there is another one scheduled for completion and commissioning in Kano shortly.

I will only implore stakeholders to co-operate with NERC to fast-track the completion of the Regulations for metering service providers and eligible customers.

They will ultimately help us to distribute over 6,000 MW of Power that we now have available, out of which we are only able to distribute about 4,000 MW because of problems at the distribution end.

We also remain open to useful and practical suggestions from each DisCo about what we can do to help them overcome the distribution equipment deficit that now exists. We commit to continue to support the entire value chain to deliver on the promise of privatization.

Welcome to the September monthly meeting.

–Remarks By Babatunde Raji Fashola, SAN, Minister of Power, Works and Housingat the 19th Monthly Power Sector Operators Meeting Held in Akangba, Surulere On Monday 11th September 2017

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