NERC Reawards Power Licences on Disputed Ariaria Market to New Operator

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Chineme Okafor in Abuja
The Nigerian Electricity Regulatory Commission (NERC) yesterday made a controversial regulatory declaration, stating that it had awarded to a new operator licenses to generate and distribute electricity within the disputed Ariaria Market in Abia despite the existing license to distribute electricity in the market still under contention.

With the new licences, NERC indicated it might no longer regard an existing licence held by Geometrics Aba Power for electricity supply to Ariaria, or that of Enugu electricity distribution company (Disco) which has contested Geometrics rights over the market for years now.

In a statement signed by its Head, Media Unit, Mrs. Vivian Mbonu, and sent to THISDAY in Abuja, commission said it took a decision to re-award an operational licence over the market to a new operator – Ariaria Independent Energy Distribution Network Limited, for the generation and distribution of 9.5 megawatts (MW) of electricity because it was protecting the interests of the public.

It explained it did this in line with Section 71(6) of the Electric Power Sector Reform (EPSR) Act 2005, adding that the licences to the new operator would address the challenges of power supply to the market.

“The NERC in pursuit of overriding public interest has granted a 9.5 megawatts embedded electricity generation licence to AriariaMarket Independent Power Plant Limited and an Independent Electricity Distribution Licence to distribute same within Ariaria Market to Ariaria Independent Energy Distribution Network Limited

“The licences, issued in line with Section 71(6) of the Electric Power Sector Reform (EPSR) Act 2005 were granted after careful consideration of the applications in public interest to promote access to common goods and to promote commercialisation and industrialisation for which Ariaria, a leading commercial hub in the country is reputed for,” said the NERC in its statement.

It further explained: “Both licences granted to Araiaria were affirmation of the Commission’s commitment and response to the long-time yearnings of the market for a stable, reliable and sustainableelectricity supply to improve quality of goods and services by Nigerian enterprises and entrepreneurs.”
Ariaria and Aba had been under contention since the privatisation of the power sector in 2013, with Enugu Disco laying claim to it despite a reported 2005/2006 agreement the federal government reached with Geometric Power Ltd for it to build a 188MW power plant in Osisioma Aba, and exclusively distribute to Aba and Ariaria within a specific period of years.

Both Geometric and Enugu Disco have however beenin court over the dispute, but were in 2016 asked to settle out of court through the intervention of the Vice President, Prof. Yemi Osinbajo.
The out of court settlement, THISDAY learnt had not been concluded before the federal government through the Rural Electrification Agency (REA) contracted a new operator to build an embedded power plant in Ariaria.
The construction of the embedded plant was equally challenged by Enugu Disco before the NERC granted the new license to Ariaria Independent Energy Distribution Network Limited.

THISDAY however tried to reach a former minister of power, Prof. Barth Nnaji, who owns Geometrics Power, for his comment on the development, but could not reach him as at the time of filing this report.

However, an official of Geometrics who spoke on condition of anonymity informed the paper that the NERC may have reneged on its promise to be fair in dealing with the issue when it was presented to it.

The official explained that both Geometrics and Enugu Disco had intimated the commission on the development and were invited to a meeting where the REA and Ariaria Independent Energy Distribution Network Limited reportedly failed to show up.

He noted that the NERC promised to set up a fresh meeting with the REA and the new operator to iron out the issues but then went ahead to grant a licenses for the embedded power plant. The official expressed his concerns with the development but did not state what line of action Geometrics would likely take.

The two business units of Aba and Ariaria, were previously owned by the Power Holding Company of Nigeria (PHCN) but handed over to Enugu Disco on November 1, 2013, following the privatisation of the PHCN assets despite Geometrics reported agreement with the government over them.