Minister Tegbe: Federal Government Cannot Keep Covering Electricity Tariff Gaps

Minister of Power Joseph Tegbe has said the Federal Government is no longer in a position to keep absorbing electricity tariff shortfalls while also trying to provide power nationwide. He made the comment at an energy conference recently hosted by the Harvard Business School Association of Nigeria, where regulators and industry figures met to examine the country's electricity sector problems and possible strategies. Tegbe said the administration is working to resolve structural problems in the electricity market, such as weak revenue collection, inadequate metering infrastructure, growing debts to power generation companies (GenCos), and flaws in the market's design. He stressed that operators along the value chain failing to recover their operating costs is a key reason the nation cannot sustain stable electricity supply. "Commercially viable pricing will work where the supplier can actually collect his money and get paid. There’s no sense in commercially viable pricing if you don’t collect money," he said. The minister said the government is working with the Nigerian Electricity Regulatory Commission (NERC) to revise tariff assumptions and market structures. He questioned whether the Nigerian Bulk Electricity Trading (NBET) model remains viable, noting that it buys electricity in bulk and resells it to distribution companies (DisCos) without recovering full costs, and said the agency should have been phased out years ago. "As for NBET, we know that every human being, even businessmen in this room, would take opportunities where they see it. NBET as a government entity today buys bulk, sells bulk. Because it’s the government, people take advantage," Tegbe explained. "Now, NBET ought to have been sunset about five years ago, and I’m telling you my own plan, at the end of the day, is to move from that model. That model will not help Nigeria. We can’t keep covering tariff shortfalls and think we’ll give power to every Nigerian."