By SUNDAY ABBA, Abuja
The Nigerian Electricity Regulation Commission (NERC) has says through effective regulation, it has saved the federal government several trillions of naira in subsidies thereby contributing to improved fiscal position of the government.
Vice Chairman of the Commission Musiliu Oseni dropped the hint while delivering his welcome remarks during the opening ceremony of NERC’s 20th anniversary celebration on Thursday in Abuja, commending the improvement witnessed by the sector in last two decades that the Commissioner has been regulating the industry.
He said, “Relative to 20 years ago, not less than 30% of the electricity consumers have experienced significant improvement in their electricity services.
“Through effective regulation, the Commission has saved the federal government several trillion of naira in subsidies thereby contributing to improved fiscal position of the government.
According to him, going forward, the Commission’s regulatory focus will be to ensure improved reliability of power supply, especially by unlocking the investment potentials in the transmission segment of the value chain.
He said, “As we continuously strive to provide regulatory oversights to ensure improved reliability of supply, the Commission shall focus more attention on unlocking private investments especially in the transmission segment of the value chain.
“Our transmission networks require significant investments. However, our fiscal realities have shown that the government alone cannot fund it.
“Necessary regulatory framework will go a long way to attracting private investments.We have commenced the process through the creation of the Transmission Infrastructure Fund (TIF). I hope this effort will receive the necessary supports from the policymakers.”
Another key priority area, according to him, is continuous push for fiscal discipline and transparency at TCN. The Commission shall continue the regulatory process for the transition to bilateral trading, and handholding of the state regulatory commissions for capacity development.
He tasked government on a deliberate policy to power our industry for economic prosperity, arguing that prioritising access to electricity through mini-grids over industrial powering is counterproductive.
He said, “You can power access through Mini-Grids but you can’t power your economy to prosperity. Thus, there is a need for policy rethink on the utilisation of the USD2bn currently available to the Rural Electrification Agency (REA).
A substantial portion of the fund should be dedicated to providing end-to-end solution to the power supply challenges facing our industrial hubs.
Congratulating the subnationals that have already keyed into the Electricity Act of 2023 and have operationalised their regulatory commissions, Oseni advised his colleagues at the State Electricity Regulatory Commissions to avoid what he termed ‘regulatory capture’ by striving hard to be an unbiased umpire and refraining from compromising position with their licensees no matter the situation.
As at today, 15 states have got their transfer order from the Commission. Eleven of them have crossed the six months transitional period but only eight out of the eleven are currently operational. There is a vacuum in Edo, Ogun and Oyo states, according to Oseni.
Speaking during the technical session at the event themed: “The Political Economy of the Power Sector Reforms under Bifurcated Constitutional Responsibilities”, Minister of Power, Adebayo Adelabu, warns against the tendency to constantly and hastily amend Electricity Act, insisting the model must be fully tested to see the outcome, a position Dr Sam Amadi, the guest speaker at the 10th anniversary of the Association of Power Generating Companies (APGC) held recently in Abuja, and former chairman, Nigerian Electricity Regulatory Commission (NERC), espoused in his remarks.
According to Adelabu who commended NERC for effective oversight of the sector for past two decades, the act is a game changer for the electricity industry.
He said, “Over these two decades, the Commission has laid the foundations of market stability – developing tariff frameworks, consumer protection mechanisms, and regulatory guidelines that have shaped our power sector’s evolution.
“This Act, coupled with the prior constitutional alteration, represents the most profound change in our sector’s history.
“It effectively bifurcates constitutional responsibilities, demonopolising the electricity market and empowering state governments, not just to generate, transmit, and distribute electricity within their territories, but also to regulate their individual state electricity markets. This move from a single national grid to potentially multiple, integrated sub-national markets is a game-changer.
Speaking further, the minister said, “At the Federal Ministry of Power, our vision is one of cooperative federalism in the electricity sector – where both tiers of government work together in harmony for the common good.
“To this end, we are developing a National Electricity Policy Coordination Framework to align federal and state actions; supporting states, establishing new regulators, and strengthening investor confidence through policy consistency and regulatory clarity.
“The federal government has provided the legal and policy framework. The states now have the autonomy to act. The private sector has the capital and innovation to invest.
On his part, Managing Director of Sahara Group and former chairman of Egbin Power Plc and board chairman of Ikeja Electric Kola Adesina insisted that Nigeria has not yet gotten it right in its quest for interrupted, incremental, and quality electricity supply, reeling out questions as to why, as he blamed policy inconsistency.
“For influx of investment to come, there is one thing required. The policy setting must be consistent.
“There must be stability in the system. We must see the hunger and the desire in the leadership in resolving the current problem that would engender more investment to be made by us,” he said.