Mohammed Shosanya
2 July 2009
Lagos — The Nigerian Electricity Regulatory Commission (NERC) and the Nigerian Accounting Standard Board (NASB) are collaborating to develop an accounting system to aid the determination of electricity tariff, report cost and expenses for the Nigerian Electricity Supply Industry (NESI).
A workshop took place in Lagos weekend with participants drawn from both the private and public sectors to make contributions to put in place the accounting standards.
At the opening session of the workshop, the Commission's Administrator, Malwwwam Imamuddeen Talba, said the exercise was critical to the attainment of uniform accounting standard for the industry.
He explained that the emerging power industry as at today does not have standard reporting procedure because of the diverse backgrounds of the operators in the now liberalized power industry.
According to him, "While the 18 offshoot companies of the Power Holding Company of Nigeria (PHCN) are coming from public sector background, the newly licensed Independent Power Producers (IPPs) are guided by private sector accounting processes and reporting framework, while the legacy IPPs are bringing multinational corporate background.
"There is high tendency for different accounting practices and financial reporting requirements from what is expected by the regulator."
Another reason advanced by the Administrator was that such industry standard would provide accurate means of reporting cost and expenses which are required for tariff determination, fair comparison of the performance of the regulated entities.
Talba said it was in line with the international best practices to have accounting standard for power supply industry and that the Nigerian industry would not be an exception if it must attract foreign investors as well as provide a uniform means of valuing assets within the NESI.
Meanwhile, the Commission recently put in place the Safety Manual, vesting contracts and trading arrangement for the transitional and medium stages of the industry, NERC Business Rules in addition to earlier ones like the Grid Code, Metering Code, Distribution Code, NERC Business Rules, Customer Service Standards, and Market Rules as part of the reforms going on in the industry.
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