By SUNDAY ABBA, Abuja
The Nigerian Electricity Regulatory Commission (NERC) has urged the Nigerian Bulk Electricity Trading PLC (NBET) to come up with a clear and convincing explanation as to why its operational license should be renewed as requested.
NBET was given the advice Thursday in Abuja as the Commission held a public hearing on the application it filed for the renewal of its Purchase and Resale Licence.
NBET had earlier applied for renewal of its license for a 5-year term as its current license expires on 25th November, 2024.
Speaking, the Commissioner (Legal, Licensing, and Compliance, Dafe Akpeneye who chaired the session, said the long presentation made by the Acting Managing Director and Chief Executive Officer (MD/CEO) of NBET, Mr Johnson Akinnawo, did not address the essence of the license renewal satisfactorily.
He therefore urged NBET go back to the drawing board and come up with a clear picture of what it thinks it could do differently this time to change the narrative in the Nigerian Electricity Supply Industry (NESI) within the 5 years extension being canvassed that would warrant the license renewal, noting that the bulk trader had not performed its role to satisfaction in the past.
Assuring the MD that the Commission would take a decision “on the basis of the strength of what you have presented before us”, Akpeneye said, “Since your license expires on the 25th of November, there may no opportunity of another hearing any more, but you still have the opportunity to make further submissions in support of your application.
However, in their respective submissions, stakeholders who were privileged to speak, agreed that the role of NBET is still needed for the industry to move forward. But some advocated indefinite license, others believed it must have an validity period.
One of such speakers was the MD of Azura-Edo Power Company, Mr Edu Okeke, who argued in favour of an indefinite license for the bulk to trader.
According to him, it is difficult to get financiers or investors to stake their money on a license that is only valid for a certain period, especially when it is for a short term of 3 to 5 years, due to uncertainties over repayment.
“As long as we continue giving out license for a number of years, no lender will lend to the industry because they will be looking at those number of years,” Okeke said, adding that NERC has enough of instruments with which to regulate and enforce compliance aside issuing a time-bound license.
In his presentation earlier, the NBET boss argued that the agency was still very relevant in the industry for the desired turn around to be achieved effectively, adding that it still superintends over some contractual arrangements even as it administers the tariff and market shortfalls among others.
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He noted that NBET had been a major supporter and facilitator of the transition to a bilateral contract regime and still has a critical role to play in ensuring a successful transition, stressing that the ultimate goal is to have an energy exchange that can boast of being the largest in Africa.
Recalling an order issued by NERC earlier seeking to steer the electricity market towards a more contract-based and disciplined one where the willing seller, willing buyer model could thrive with little or no government support, the MD expressed NBET’s commitment to work with the Commission to achieve the objectives.
Mr Akinnawo said, “Within the five (5) year trading license period, NBET will transform into an energy exchange,” adding that before now NBET has been able to procure power bilaterally with other entities in NESI.
According to him, the exchange will among other objectives promote bilateral trading between industry players through an automated energy trading platform/exchange developed and deployed for the sale of electricity, with multiple energy brokers playing a key role In Uniting energy suppliers and customers registered on the platform.