The Minister of Power, Chief Adebayo Adelabu, said that it is necessary to migrate to cost-reflective electric tariff if the federal government cannot afford subsidy.
Adelabu said this on Wednesday when he visited the 750 megawatts Olorunsogo Power Generating Plant in Ogun State and the 500mw Omotosho Generating Plant in Ondo State as part of his nationwide inspection visit to power installations of the federal government.
He stated that the National Independent Power Plants being operated and managed by the Niger Delta Power Holding Company Plc were currently suffering under-capacity utilisation of below 25 per cent due to gas supply constants, according to ThisDay.
“And I am amazed at the level of underutilisation of these power installations. Each of them operates below 25 per cent capacity, when we are still complaining that power generation is low in this country. The under-capacity utilisation is due to a variety of reasons.
“The major part of it is the shortage in gas supply to these installations, which is why I needed to see these plants myself, to look at what can we do to improve the operational capacity of these plants,” the Minister said.
He maintained that he would later engage with the management of the power companies to explore better ways of collaboration and cooperation such that the federal government could support them to improve their operational capacity, and consequently improve the level of power supply to the distribution companies.
“And we also want to appeal to the federal government that once there is a subsidy promise, it has to be fully funded. If our government is not ready to fund subsidies, it is actually better for us to migrate to a fully-cost-reflective tariff, because liquidity is a major issue in the sector, which has led to a huge debt being owed power generating companies,” he added.