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Empowering electricity consumers through advocacy network

By Emeka Anuforo
06 May 2015   |   3:46 am
CAN consumers really be kings in the Nigerian Electricity Supply Industry (NESI)? Will a time ever come in Nigeria when electricity consumers would have the full powers to hold distribution companies to account?
Provision of power.

Provision of power.ty

CAN consumers really be kings in the Nigerian Electricity Supply Industry (NESI)? Will a time ever come in Nigeria when electricity consumers would have the full powers to hold distribution companies to account?

Will a time come when operators would fall over themselves to ensure that every electricity consumer is happy or adequately compensated for failure to satisfy their demands? These are questions begging for answers.

Indeed, one of the observable gaps in the current electricity market in Nigeria is the absence of knowledgeable, credible, and broad-based advocates or advocacy groups for electricity consumers.

This is not to say there are no individual electricity consumers, geographical or occupational clusters of electricity consumers, or even non-governmental organisations seeking to protect their own interests or the interests of their members or aggrieved consumers that contact them.

The challenge, according to experts, is that the individuals and groups are too dispersed, fragmented and their levels of engagement superficial, too adversarial and too episodic to have the desired impact in the sector.

A Public Affairs analyst, Dr. Usman Arabi, said the operators of the electricity market are few, well-resourced and highly organised.

He told The Guardian that “as operators, they have the incentives to gain better understanding of the technicalities of the industry, and they could afford the best of intellectual support to shore up their knowledge base and negotiation capacity. They are also better acquainted with the issues and the processes of the sector and have greater access to the decision-making process.

“The sum of all these is that when compared to the consumers, the operators have a greater share of voice and are better positioned to project their interests and shape outcome in the privatized electricity sector in Nigeria.”

But going by assurances by the Nigeria Electricity Consumers Advocacy Network (NECAN) which officially commenced operations last week, consumers need not wait for too long. Indeed, the Network is coming with a vow to give a new lease of life to consumer advocacy issues.

The organisation, which was pioneered by the Nigeria Electricity Regulatory Commission (NERC), has also promised tough time for distribution companies which fail to meter consumers.

NECAN is the first of its kind in the power sector with a clear cut task to amplify the voice and bargaining power of electricity consumers as critical stakeholders in the regulatory process. The group would also provide a structured platform for electricity consumers to be better organised, sensitized and constructively engaged in the electricity decision-making process and generally improve the capacity of electricity consumers to make informed and fact-based contributions to consultative and deliberative aspects of decision-making.

At the inaugural meeting of the Steering Committee of the new body, in Abuja, officials explained how the group would work independent of NERC and plans to sensitise the public using all media platforms across the states to grow members. Chairman of the Committee, Chief Tomi Akingbogun, said consumer affairs in the Nigerian Electricity Supply Industry (NESI) would no longer be relegated to the background.

The steering committee was set up by the Nigerian Electricity Regulatory Commission (NERC) to work out modalities to register NECAN as a formidable national advocacy group that could hold private investors accountable in the electricity distribution chain.

NECAN, he stressed, is putting all legal process in place to get the network activated shortly.

He noted: “With the formation of the advocacy network, we are opening the door to all members of the public to be heard. We are going to have offices set up with officials on ground.

“We assure you that we are not going to be NERC’s baby. We are going to represent the interest of the public by making sure that voices of people at the rural areas are heard.”

On its part, NERC explained that it would first midwife the advocacy network to allow it gain some level of bargaining advantages in the sector. The Commission blamed the deficit of consumer voice and power on the fragmented nature of individual consumers and consumer groups, stressing that their levels of engagement was too superficial to have the desired impact on outcomes in the sector.

NERC also harped on how it hopes to redefine the way electricity consumers are engaged in the sector with the advocacy network.

NERC Chairman, Dr. Sam Amadi stressed that undue operators’ advantages also undermine transparent and accountable processes which define a fairly regulated electricity market.

Such overbearing influences, he noted, would be cut down by introducing and sustaining democratic processes and models in the way decision and choices are arrived at by operators and consumers in the sector, hence the network.

He said: “We have institutionalised anti-corruption practices and procedures to inoculate NERC against regulatory capture, but in spite of our noble intent and progressive actions, outcomes are still not fair to consumers. Until consumers are organised and therefore able to contend against operators, the democracy bargain in the Nigerian electricity market will remain deficient.”

He stated further: “To cure this deficit, we are supporting the establishment of this consumer advocacy network. This network can easily build technical and political capability to effectively contend against other organised interests in the electricity market.

“It should be a major contributor to the big debates about building smart grid, clean energy, privatisation and modernisation of the electricity grid. It should also be involved in the debate about the constitutional framework for energy policy in Nigeria.”

The NERC chief noted that consumers were critical agents in the emerging electricity industry.

His words: “Either as consumers per se or as pro-consumers who could sell self-generated electricity to the grid, the consumer needs to be more engaged and more eloquent in the deliberation about the future of electricity in Nigeria. There is a strong case to incorporate the consumers as part of the decision makers in the electricity market. This is the reason we are proposing the setting-up of NECAN,” he explained further.

Experts harp on the imperatives of addressing the imbalance in the supply and the demand end of the electricity sector for two critical reasons.

One is that by the nature of the electricity market, the operators are natural monopolies.

Analysts posit that the lack of competition in the industry grants uncontested market power to the operators and leaves the customers with little or no wriggle room in terms of choice and the capacity to use their purchasing power to shape pricing or demand better service.

The negative effect of market power on both quantity and quality makes a compelling case for effective regulation and promotes consumer protection to the core of regulatory work.

However, this also presupposes that the customers are well organized and know how to and are primed to pursue their interests within the cover provided by the Regulator. At the moment, this is not necessarily the case.

The second compelling reason for an intervention to correct the imbalance in the supply and demand end of the market, according to Arabi, is the recent decision by the Nigerian Electricity Regulatory Commission (NERC) that operators will, in consultation with consumers, from now on set electricity tariffs.

“This responsibility can only be effective when consumers equally have the capacity to match the operators. But this is not so. With the present state of play, it is either that the party with higher knowledge power and greater share of voice will dominate and solely determine outcomes, or the expected deliberations will be mostly at emotional, rather than rational, levels. This definitely will defeat the good intentions behind consultative joint rate-setting,” Arabi noted.

In furtherance of its consumer protection mandate, NERC says it has taken the strategic decision to pro-actively empower electricity consumers so that they can be better placed to make informed inputs into the regulatory process, be better enabled to advocate for their interests on the basis of knowledge and reason, and be in a stronger position to influence outcomes in the sector.

“This is the rationale for the proposed Nigerian Electricity Consumer Advocacy Network (NECAN),” Amadi posits.

The network is expected to develop and implement a robust work-plan for organizing electricity consumers nationwide and on a consistent and sustainable basis; educate and sensitize electricity consumers about their rights and privileges and about the critical issues in and dynamics of the electricity sector; conduct or commission regular studies aimed at demystifying the operations of the industry, enhancing the negotiation power of the consumers, and promoting transparency and accountability in the sector.

NECAN is also expected to prepare policy and position papers to advance the interests of consumers and serve as knowledge-based inputs into NERC’s decision-making process; undertake regular and structured advocacy on behalf of electricity consumers with NERC, industry operators and other key stakeholders such as the National Assembly, the Ministry of Power and the media.

It is also expected to facilitate dialogues and consultations between electricity consumers, NERC and the operators; and develop and implement a robust communication strategy to increase the voice and agency of electricity consumers in the sector.





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