Nigeria @ 58: Effective Market Regulation Key To Power Problems – Stakeholders

Some stakeholders in the power sector says effective market regulation in the industry is the answer to Nigeria’s nagging power problems.
The stakeholders also said with less government interventions, the industry would achieve a sustainable market environment and effective delivery of electricity to customers.
In separate interviews with newsmen in Lagos on Sunday to mark Nigeria’s independence anniversary, they said the approach if adopted would guarantee energy sufficiency, improved delivery volume and better duration.
Mr Abiodun Ogunleye, the Chairman, PowerCap Nig. Ltd, said effective competition among power operators would increase value delivery to customers.
“Today looking back with all sense of responsibilities, we can say the hopes of the father’s and or architect’s of the Nigerian Power Sector privatisation projects have not been achieved at all as the inadequacies and pains associated with the sector on the nation’s social and economic life is getting worst.
“In advising the government, we would need to ask ourselves how we got to this point and do an honest stock taking. We need to agree to keep the bulk market or otherwise dismantle the planned market structures.
“Instead of wasting efforts at making Independent Power Producers (IPP) work, we should organise a public bid for generation capacities.
“Government should ensure their representative on the boards of the privatised companies are effective people who can effectively engage their private sector counterparts.
“We have to effectively encourage the DISCOs to create smaller retail units that can be more effective in dealing with the meter challenges, and also ensure commitments of the privatised companies to invest in developments,’’ he said.
Mr Adefemi Simpson, an energy expert urged the Federal Government to formulate a legislation that would deregulate market for prepaid meters.
He insisted that a law must be enacted to allow an electricity consumer to buy meters directly from manufacturers.
Simpson, who is also the Managing Director, Prefect Engineering Company, said this would end the discretional powers of Discos to unilaterally determine the estimated amount to be charged electricity consumers.
He said that there is need for amendment of the Electric Power Sector Reform Act 2005, to include new sections 68 to 72 which would prohibit estimated billing methodology in Nigeria.
“A deregulated electricity meter market in the country will drive up new meter installations and subsequently cut down the practice of estimated billing across the distribution networks.
“I believe that when the likes of MTN came into this country, they didn’t force phones on people. People bought phones and their sim cards separately.
“Today, no telecoms firm demands that you must get phones from them to be able to connect to their services, if that is the case, why is it different in the power sector,” he said.
Mr Jubril Kareem, Head, Energy Desk of ECOBANK, said that for the challenges in Nigeria’s power sector to be resolved, electricity supply must be improved.
He said that cost reflective tariffs are essential to any rapid development of electricity supply.
Kareem said that internationally, regulators have developed various methodologies to determine appropriate revenue levels required by regulated entities involved in the generation, transmission and distribution of electricity.
Kareem argued that the revenue to be earned by a utility should be equal to the efficiently incurred cost to supply electricity.
“A well designed regulatory framework protects consumers from monopoly abuse and investors from arbitrary political action and provides incentives for efficient operation and investment in the power sector.
“The product of effective regulation directly or indirectly improves the performance of the power system by ensuring adequate capacity additions for power procurement from conventional and renewable sources to meet the projected demand.
“Concerning our infrastructure, one would not have the slightest hesitation to state that no other issue is of greater concern or interest to the public than the state of our electricity supply in the country.
“Manufacturers and other businesses have consistently cried out on the huge negative impact of the current poor power supply on their operations.
“As a result, many businesses have relocated, and some others are at the verge of relocating to other countries or closing down their operations in Nigeria because of high electricity and energy cost.
“Nigerians in general have also persistently complained, not only of poor supply of electricity, but also of what is now popularly described as crazy bills from electricity distribution companies,” he said.
Another expert, Mr Muyideen Ibrahim, the CEO of BAMIB Resources and Investments Company Ltd (BRIC), described inadequate and delayed maintenance of facilities, insufficient funding of power stations and obsolete equipment as the major challenges of power generation in Nigeria.
Ibrahim urged NERC to regulate the operation of the power industry and embark on a holistic and speedy review of the Power Sector Act 2005.
He also called for more investment in the sector, saying this would have positive multiplier effects on people’s lives.
Ibrahim noted that the transmission arm was a critical chain in the power sector, which coordinates both generation and distribution.
He insisted that its current infrastructure should be upgraded to meet today’s power challenges.
“Electricity is an expensive business, it is a business that needs money and if it is business it means the operators will want to make money and this is why we are saying the problem is all ‘ours’.”
Ibrahim pointed out that government and stakeholders in the industry “have their own share of the blame… but essentially the Nigerian public carries much of the blame.”
TheElite Times reports that the Transmission Company of Nigeria (TCN) daily generation reports shows that hope rose for improved power supply in the country as generation increased from 2,700 megawatts in 2017 to 4,750 megawatts in 2018.
It would be recalled that NERC says 58 per cent registered electricity consumers in the country paid tariff through the estimated billing methodology.

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