Fashola: NERC Has Regulatory Powers to Make Electricity Reforms Work

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The immediate past Minister of Power, Works and Housing, Mr. Babatunde Fashola, has said the Nigerian Electricity Regulatory Commission (NERC) has enormous regulatory powers to make the country’s electricity reforms work.

Fashola, said while answering questions at the recent ministerial screening exercise, that the NERC needed to be supported by stakeholders to exercise its powers to sanction erring operators who refuse to serve consumers efficiently in the sector.

He, noted, that issues of consumer complaints and regulations should be directed to the regulatory agency for effective administration and compliance, stating that sections of the country’s Electric Power Sector Reform Act (EPSRA) 2005, vested enormous power on NERC.
“Let me speak to two powers that the regulator has in Sections 73, 74 and 75 of the electric power sector (EPSRA). One of the powers that was vested in that law by the regulator is to undertake an investigation and do several things.

“It could mean demanding the license of the licensee or even cancelling the license as we have seen in cases like the Central Bank of Nigeria, and as we have seen in some cases in Economic and Financial Crime Commission (EFCC) and Nigeria Broadcasting Commission.

“So, the powers of the regulator for making the reform work must be targeted towards ensuring minimum service levels, licensing conditions are met and until we fully exhaust those powers, it will be premature to say that the reform is not working,” said Fashola.
He added that: “Often times, when we privatise things, who goes back to check the service level compliance? Who pulls a lever of compulsion or caution as the case may be for us? I think that is something we should spend time to look at.”

“If we want to know about issues wrong with SIM cards, call drops and the likes, we do not go to the Ministry of Communication, we go to Nigerian Communication Commission (NCC).

“If we want to know what is happening in banks, we do not go to the Ministry of Finance, but to the Central Bank of Nigeria, and it is the regulator we must all support now to exercise the fullest powers that have been given to the regulator and there is a lot of power there that they can act on behalf of us and I always say, I am a consumer myself,” the former minister added.

He also stated the reasons why the power sector privatisation was done by the country, noting that in 2013, before the handover of the power assets to private investors, the then Chairman of the Technical Committee of the National Council on Privatisation (NCP), Mr. Atedo Peterside, told a forum of the Bankers’ Committee that it was to restore the sector’s productivity.

“The purpose of privatising the Discos and Gencos was not just to transfer ownership of the assets. The primary purpose was to bring into play new owners with ‘deep pockets’ who could finance, and/or access financing for the rapid restoration of lost capacity, and/or add significant new capacity to make up for decades of government neglect and mismanagement,” said Fashola.

He, however, noted that the financial viability of the sector had remained a significant challenge threatening its sustainability.
Fashola, also said the NERC had indicated that, “the liquidity challenge is partly attributed to the non-implementation of cost-reflective tariffs, high technical and commercial losses exacerbated by energy theft, and consumers’ apathy to payments under the widely prevailing practice of estimated billing.”

The NERC had disclosed that over five million Nigerian electricity consumers were unmetered.
Mr Abdulkadir Shettima, NERC General Manager, had said this at a forum for Meter Asset Programme (MAP) in Lagos. NERC had issued permits to some MAPs to commence roll out of prepaid meters to tackle metering gap and estimated billing.

According to NERC, the move is in accordance with Section 4(3) of the MAP Regulations 2018, to MAPs that were successful in the procurement conducted by Abuja and Jos Discos.
Section 4(3) of the MAP Regulation 2018 also requires all electricity distribution licensees to engage MAP that would assist, as investors, in closing the metering gap.
Also, it is to assist in eliminating the practice of estimated billing in the Nigerian Electricity Supply Industry, NESI.