FG to Take Over BEDC Due to Poor Performance

• Delta, Edo, Ekiti, and Ondo states petitioned NERC over the poor power supply, seeking to play active roles in the management of BEDC.
• The state and federal governments have 40 per cent of BEDC, of which the four states have 34.2 per cent of that 40 per cent.

The federal government has concluded plans to take over Benin Electricity Distribution Company (BEDC) due to alleged prolonged poor performance. This comes barely a month after the federal government took over Kaduna Electricity Distribution Company over N10 billion in debts.

BEDC, one of the successor distribution companies (DisCos), created following the unbundling and privatisation of Power Holding Company of Nigeria Plc, currently distributes electricity in Delta, Edo, Ekiti, and Ondo states, with a geographical coverage of 57,353 square kilometres.

The Nigerian Electricity Regulatory Commission (NERC), has already pencilled down new directors and management to manage the DisCo in the coming days.

Meanwhile, the governments of Delta, Edo, Ekiti, and Ondo states, which complained about poor service delivery to their people, have petitioned NERC, seeking to play active roles in the management and decision-making process of BEDC. In the joint letter, the states requested a meeting with the commission to discuss their intentions.

The states indicated interest in exercising their rights to participate in the company’s decision-making. In addition, they also called for the unbundling of the DisCo’s operational areas based on state boundaries, stressing that they had not given consent to other stakeholders, including the Bureau of Public Enterprises (BPE) to act on their behalf.

In their letter, “Notification of Interest to Exercise Shareholder Rights in Benin Electricity Distribution Company” to NERC, the state governments said, “We write to formally inform NERC of the intent of the governments of Delta, Edo, Ekiti and Ondo states (the BEDC State Governments) regarding our collective residual equity in the Benin Electricity Distribution Company, BEDC.

“Please note that our demand is not capricious and merely wishes to correct a historical lapse. We wish to emphasise that at no point did the BEDC state governments give any Power of Attorney (PoA) to either the Federal Ministry of Finance Incorporated or the Bureau of Public Enterprises, BPE, with respect to our shareholding in PHCN successor, Benin Electricity Distribution Company, or the post-privatised entity.

“It has come to our notice that the commission intends to exercise a regulatory takeover of BEDC by March 31, 2024. The commission is kindly requested to formally notify the BEDC state governments before taking any regulatory action to appoint new directors and a management team for the company. We also urge the commission to immediately commence the process of unbundling BEDC into operational areas along state boundaries.”

On his part, the Commissioner for Infrastructure & Public Utilities, Ekiti State, Prof. Mobolaji Ebenezer Aluko, further disclosed in an interview with Vanguard that the state and federal governments have 40 per cent of BEDC, of which the four states have 34.2 per cent of that 40 per cent.

Aluko stressed that nationally, all states have 27 per cent of the 40 per cent of government, with the federal having 13 per cent. According to him, this means that the states have as much right, even more rights, than the federal government, to sit at a table to determine the future of the DisCos.

He added, “The Federal Government has asked the DisCos to unbundle along state lines, according to the Electricity Act 2023. The BEDC states are merely demanding a seat at the upcoming discussions in the spirit of subnational democracy. 

”We also believe that our participation will lead to a more efficient distribution of the abysmally small energy currently available nationally. That is, 13 gigawatts, GW, capacity generation – 8GW Transmission capacity – 3-5GW distribution after Aggregated Technical Commercial and Collection Loss, ATC&C losses.”