Electricity In Nigeria: Getting The Transitional Market Right (2)

(By Okechukwu Ebirim)

Electricity remains a critical social service of the government although it is now being given a business model. The Ministry of Power also has to design and implement policies and programmes with a view to upgrading the nation’s gas infrastructure with a view to making it readily available for power generation. This task will require synergy with the Ministry of Petroleum Resources and other players both public and private in the gas sub-sector. The exploitation of renewable energy and other conventional sources of fuel for power generation will also require a lot of policy incentives to encourage investment in this direction.

Continued from yesterday

NERC on its part is charged with supervisory powers over the entire Electricity Market. The Commission has a responsibility to constitute several panels and officers who will directly take charge of market governance. The principal committees to govern the market are the Stakeholders Advisory Panel. This panel has several functions among which is recommending appropriate amendments to the Market Rules and the Grid Code as well as advising NERC on technical matters pertaining to the electricity market.

  Another panel is the Dispute Resolution Panel which is charged with resolving disputes brought before it as they relate to the operation of the electricity market. Connected to the functions of the Dispute Resolution Panel is the Dispute Resolution Councillor whose office has a duty to ensure that the dispute resolution mechanism of the electricity market functions properly. The Market Surveillance Panel is another critical one. It is charged with ensuring that the electricity market is not abused by participants through unwholesome practices. This panel is also to monitor both the System Operator and the Market Operator in the discharge of their functions. However, complaints against the System Operator or the Market Operator are to be filed with the Stakeholders Advisory Panel.

   What will however remain an issue for NERC as the Transitional Electricity Market commences is the extent to which electricity consumers have been metered. Credit Advance Payment for Metering Implementation (CAPMI) is an interventionist scheme through which NERC intends to ensure that consumers seeking meters are so provided upon their making down payments. This scheme became necessary when the Commission came to terms with the fact that most Discos had failed to provide their customers with meters despite the fact the cost of such meters had been factored into tariffs charged electricity consumers. The bottom line is that estimated billing must be brought to an end urgently so as to put a stop to incidents of “crazy bills”. Crazy bills have been deployed by unscrupulous elements to rip off tariff consumers. This practice must be hurriedly brought to end under the Transition Electricity Market. As such, the new Disco operators have a duty to make meters available to their customers by cooperating with NERC to ensure that the CAPMI scheme achieves its purpose. NERC, too, must ensure it continues to place high premium on consumer protection. The Discos must be made to provide electricity consumers with functional Consumer Complaints Units within reasonably proximity. They must be made to facilitate the establishment of consumer fora in, at least, every local government area of the country. The carrot and stick approach may have to be adopted by NERC on the issue of consumer protection. The Commission must, therefore, draw appropriate lessons from the communication sector where the NCC continues to struggle with checkmating shoddy practices among GSM service providers whose services most times leave so much to be desired.

  The Minister of Power who is saddled with overseeing both the policy and the general infrastructure needs of the Power sector has a duty to keep driving the transformation of the Power sector. Rural electrification which is germane for the reversal of rural-urban migration and reviving agriculture must remain a top priority. The ministry also has to keep supporting the transformation of the TCN which remains an asset of the government albeit under a management contract. Thus, the upgrading of the nation’s transmission infrastructure must not be abandoned because of a management service contract. The ministry has to enter into a symbiotic relationship with the managers of the transmission system. This ought to be a relationship that will deliver a world class transmission system substantially collapse-proof and capable of handling increasing load and generation injection as the power sector grows. Electricity remains a critical social service of the government although it is now being given a business model. The Ministry of Power also has to design and implement policies and programmes with a view to upgrading the nation’s gas infrastructure with a view to making it readily available for power generation. This task will require synergy with the Ministry of Petroleum Resources and other players both public and private in the gas sub-sector. The exploitation of renewable energy and other conventional sources of fuel for power generation will also require a lot of policy incentives to encourage investment in this direction. The Ministry will also have to make the local fabrication of power equipment one of its long-term goals. This is an addition to seeing to it that Nigerians develop all the requisite know-how to operate the power sector with minimal foreign assistance. This is the path to job creation within the sector itself. This is also in line with the local content philosophy which the Oil and Gas sector is implementing at present.

  As the saying goes, the journey of a thousand miles begins with a step. The Bureau for Public Enterprises and the National Council on Privatisation have done their bit and will soon exit the stage. They vacate the stage for the Ministry of Power and NERC to drive the reforms forward. Both organs have worked very hard thus far but now the goods must be delivered. The target is 40,000 mega watts by 2020. Whether this is achievable, only time will tell but the first step is to get the Transitional Electricity Market right.

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