18 April 2017

Nigeria: NERC Unveils Six Action Plans to Stabilise Power Sector

Photo: This Day
Electricity powerlines.

The new commissioners of the Nigerian Electricity Regulatory Commission (NERC), have outlined six areas the regulatory agency would focus on going forward to revive the fortunes of Nigeria's privatised electricity market which is currently under immense operational stress.

Coming almost two months after the inauguration of the board by the Minister of Power, Works and Housing, Mr. Babatunde Fashola, the commission at the last meeting of operators in the country's power sector in Oshogbo, stated that it would focus on issues such as providing a cost efficient tariff for the sector as well as applying sanctions, where appropriate, to ensure operators comply with existing market rules.

According to a communique of discussions at the monthly meeting of the operators, the Vice Chairman of the commission, Mr. Sanusi Garba, stated that the commission would in addition to committing to keeping tariffs that would ensure a self-sustaining power sector, it would enforce the commitments made by electricity distribution companies (Discos) on metering of residential consumers, and prepaid meters for government's Ministries Departments and Agencies (MDAs).

The NERC, he added would also focus on ensuring that a centralised management of market revenues collected from all customers are maintained, that the Discos are appropriately capitalised, and procurements made within the sector are prudent.

The communique also noted that the Transmission Company of Nigeria (TCN) restated its commitment to expand the country's transmission infrastructure and improve on its operation.

Meanwhile, Fashola, at the meeting also responded to claims by the Discos that the government's recent approval of N701 billion for the Nigerian Bulk Electricity Trading Plc (NBET) to cover payments to power generation companies (Gencos) was partial and unable to solve the sector's challenges.

The Discos had through their trade association - the Association of Nigerian Electricity Distributors (ANED) made claims that the intervention fund was not the real solution to the sector's troubles. They also asked the government to consider a holistic solution that would include them for the sector rather than what they said was a half-measure.

But the minister said in response to their claims that the government was not out to reward indolent operators in the sector with financial guarantees or aids, but operators who have shown their commitment to productivity.

He said in a statement from his senior special assistant on communication, Mr. Hakeem Bello, that: "We don't have contract with an association and the regulator knows what to do in terms of the exercise of its rights and we leave them to take their decisions."

"What government wanted to achieve was not to give anybody money but to guarantee to those who did their work diligently, honestly and performed their contracts that their entitlements are receivable to be secured and paid," he added.

On payment of debts owed the Discos by government's MDAs, Fashola said the government had lately begun to verifying the debts, and recently paid about N374,551,000 owed by the Federal Secretariat in Abuja to the Abuja Disco as proof of its commitment to paying debts that it could verify.

He promised that the government would continue to pay in that vein, but expressed regrets that some Discos were yet to provide the government all the details required to verify and pay off debts owed them for electricity they supplied to its MDAs.

The minister also told the meeting that the Federal Executive Council has approved an 'Energy Recovery Programme', which, according to him, "cuts across the issues of gas, transmission, metering, loss reduction, contract enforcement, customer service and consumer protection.

More on This

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NERC report shows Discos accomplished just 12% of metering roll out in 2016 Read more »

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