The state governments noted that the decision is to ensure the efficient provision of electricity services to citizens.
The governments of Edo, Delta, Ondo, and Ekiti states have informed the Nigerian Electricity Regulatory Commission (NERC) of their intention to exercise shareholder rights in the Benin Electricity Distribution Company (BEDC).
The state governments noted that the decision is to ensure the efficient provision of electricity services to citizens.
This was disclosed in a letter dated 18 March, addressed to the Executive Chairman of NERC, Sanusi Garba.
The letter was jointly signed by the Commissioner for Energy in Delta State, Jerry Ehiwairor; the Commissioner for Mining and Energy in Edo State, Enaholo Ojeifoh; the Commissioner for Infrastructure and Public Utilities in Ekiti State, Mobolaji Aluko; and the Commissioner for Energy and Mineral Resources in Ondo State, Razaq Obe.
The officials signed the letter on behalf of the state governments.
The letter titled 'Notification of intent to exercise shareholder rights in the Benin Electricity Distribution Company (BEDC)' was also sent to the Minister of Power, Adebayo Adelabu, Shamsuddeen Usman, Chairman, Ministry of Finance Incorporated (MOFI), Director General, Nigeria Governors Forum, Chairman, Senate Committee on Power and Chairman, House of Representatives Committee on Power.
"We write to formally inform the NERC (the "Commission") of the intent of the governments of Delta State, Edo State, Ekiti State and Ondo State (the "BEDC State Governments") regarding our collective residual equity in the Benin Electricity Distribution Company (BEDC).
"After a thorough evaluation of the operational deficiencies and service delivery failures to our states, the BEDC state governments intend to exercise our shareholder rights in BEDC, to ensure the efficient provision of electricity services to our citizens," the letter reads in part.
The state governments said the provision of reliable electricity to enhance the welfare and development of people is a core priority of the government.
"As such, we cannot afford to overlook the critical importance of ensuring that electricity distribution services provided by BEDC meet the needs and expectations of our populace henceforth," the letter reads.
The state governments explained that in exercising their shareholder rights, they intend to actively participate in the decision-making processes of BEDC both at the board and management level of the company, to strengthen operations of the company and enhance service delivery, improve operational efficiency, increase electricity access to unserved and underserved communities, and ultimately, transform the electricity sector within the states.
"Please note that our demand is not capricious and merely wishes to correct a historical lapse. We wish to emphasize that at no point did the BEDC State government give any Power of Attorney (PoA) to either the Federal Ministry of Finance Incorporated (MOF) or the Bureau of Public Enterprises (BPE) with respect to our shareholding in the PHCN successor Benin Electricity Distribution Company, or the post-privatized 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 its operational areas along state boundaries," it said.
The state governments further assured the commission of their support and cooperation in exercising any regulatory action against BEDC and its core investor, provided their rights as shareholders in the company are not breached.
Lastly, the state governments requested a meeting with the commission to discuss its intention as outlined in the letter in order "to exercise our rights in the company with a view to working out how these rights will be exercised under the commission's regulatory oversight and for the benefit of all stakeholders involved."
Expert speaks
Speaking to PREMIUM TIMES, on Wednesday, the Chief Executive Officer of New Hampshire Capital Limited, Odion Omonfoman, said it is a welcome development for the states to have direct representatives on the board of distribution companies (DisCos).
He explained that one of the mistakes of privatisation is excluding the states from having any form of representation on the board and management of DisCos.
"The governments that were on ground were not represented in the operations of the utility that provided services to the citizens within the state. Issues of electricity theft, meter bypass, and vandalisation of electricity equipment are things that the government at the state and local levels are able to deal with but what we have is a situation whereby NERC in Abuja is trying to deal with these matters without any success.
"Other issues like the quality of customer service enforcing standards and customer rights are better done at the state level not by NERC sitting in Abuja and sending people all over or having NERC forum offices that are best are completely inefficient and ineffective. Right, so states, now claiming their equity rights, shareholder rights in the utilities they have equity in is long past due and I think it's high time that it happens. Again, the Electricity Act also creates a state electricity market. It's a good sign and it's supported under the Electricity Act," he said.
He, however, suggested that more states should start to claim their shareholder rights in the utilities that operate within their state's territories, and this should see improvement in the service quality of these utilities going forward.
He noted that many states have also been investing in electricity utilities.
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"States have made the largest investment in providing transformers, and feeders for communities and individuals where this utility serves. Sadly, these utilities, we claim them as their assets without any form of compensation to the State that actually funded these assets. So, all in all, great development by the four states under BEDC," he said.
President Bola Tinubu had in June last year assented to the electricity bill, which authorizes states, companies and individuals to generate, transmit and distribute electricity.
The new electricity law repeals the Electric Power Sector Reform Act (EPSRA) which was signed by President Olusegun Obasanjo in 2005.
The EPSRA (2005) provided the legal, regulatory and governance frameworks underpinning the Nigerian Electricity Supply Industry (NESI).
The new Act signed by Mr Tinubu consolidates all legislations dealing with the electricity supply industry to provide an omnibus and ideal institutional framework to guide the post-privatization phase of the Nigerian Electricity Supply Industry and encourage private sector investments in the industry.
It also provides a framework for the improvement of access to electricity in rural, unserved, underserved, peri-urban and urban areas through the use of conventional sources and renewable energy off-grid and mini-grid solutions.
With the new law, states would be able to issue licenses to private investors who can operate mini-grids and power plants but such state licenses are not to extend to inter-state or transnational distribution of electricity.
