Lagos — The non-reconstitution of new members for the Nigerian Electricity Regulatory Commission (NERC) after over six months of the sacking of the chairman and members of the commission has sent cold jitters down the spines of actual and potential private investors in the power sector, THISDAY has gathered.

The former chairman of NERC , Dr. Ransome Owan, and the six Commissioners, each of whom comes from each of the six geo-political zones, are currently facing trial over allegations of fraud, after being sacked and detained in February. NERC was inaugurated on October 31, 2005 to regulate the electricity industry, and issue licences, in accordance with the Electric Power Sector Reform Act of 2005.

THISDAY gathered that the tenure of office of the sacked chairman and six commissioners was five years and four years, respectively.But following the sack of the chairman and members of the commission, President Umaru Musa Yar'Adua approved the appointment of the Secretary to NERC, Mr Imamudeen Talba, to oversee the affairs of the commission pending the resolution of the matter.The President also approved the appointment of Mr. Alex Amakom to assist the new NERC administrator in running the affairs of the commission. But actual and potential investors in the power sector are concerned that more than six months after the dissolution of the former commission, the Federal Government was yet to set up a "legally constituted commission" to regulate the industry.

A cross section of some of the investors, who spoke on condition of anonymity, told THISDAY that the continued imposition of an administrator on the commission violates the Power Sector Reform Act of 2005 that set up NERC. Section 40 (9) of the Act stipulates that "whenever the office of chairman or vice chairman falls vacant, or on the death of the chairman or vice chairman, the President shall, within three weeks, select another commissioners to fill the vacancy under section 39."Based on this provision, the investors are concerned that power agreements endorsed by the administrator would not be legally binding since his position is "alien" to NERC Act.

Section 39 of the Act provides that "subject to section 40 (6), on the death of, or vacation of office by a commissioner, the President shall nominate a candidate to fill the vacancy and submit that nomination to the senate, within one month, in accordance with section 34."Some of the operators argued that future administration may not honour agreements entered into with the administrator on the grounds that due process was not followed.

They also disclosed that there were a lot of regulatory issues hampering the smooth take-off of Independent Power Projects (IPPs) and which only a legally-constituted NERC can sort out.The operators are also worried that some of the cases being handled by the tribunal constituted by the former NERC are all pending owing to the non-constitution of the new board.They cited the cases of Aba Power Limited's petition on NERC Order GL 059, case No: NERC/ 06/0010/08 and Attorney-General of Lagos State Vs PHCN, case No: NERC/03/000004/08, as some of the pending cases before the tribunal.But a source at NERC told THISDAY last night that the case of Lagos State Government and PHCN is awaiting judicial review in a regular court.However, THISDAY gathered the Federal Government appears to be at cross-road on how to handle the fall-out of the removal of the former commissioners.The situation was compounded by the alleged failure of the presidency to secure the mandate of the Senate before removing the commissioners.Though the Act gives the President the powers to remove NERC commissioners if certain conditions are fulfilled, the Act also provides that such removal must be supported by a simple majority of the Senators.Section 38 (2) of the Act states that: "a commissioner shall not be removed unless the request is supported by a simple majority vote of the Senate."But in his reaction, the Minister of Power, Dr. Lanre Babalola had told THISDAY that the fear of the operators was baseless.He said: "Those who are afraid have not read the law very well. They have to look at the law. What agreements are they talking about? In the past government gave people licences to build refineries, but how many of them built refineries at the end of the day? You don't do things that way; you have to follow due process. Before you appoint new commissioners, you have to get the support of the majority of the members of the National Assembly. It is not all that easy; remember that the former commissioners are still in court, challenging their removal."THISDAY gathered that private participants in the power sector had identified 40 regulatory issues that were hampering effective take-off and execution of power projects in the country.