Thursday, 8th June 2023

Why FG must proscribe NERC for power sector failure– Okorie

By Kingsley Jeremiah,
30 June 2019   |   3:11 am
The implementation of the power sector reform Act has failed. NERC is expected to enforce or rather implement the Act but the Commission is violating most of the sections of the regulation.

The power sector, privatized through the Power Sector Reform Act about five years ago has remained in a comatose state. National President of the Association for Public Policy Analysis (APPA), Princewill Okorie insisted that the sector’s regulator, Nigerian Electricity Regulatory Commission (NERC) should be blamed for the failure. Okorie spoke with KINGSLEY JEREMIAH on the regulatory lapses in the sector.
What is your take on the governance of the power sector?
The implementation of the power sector reform Act has failed. NERC is expected to enforce or rather implement the Act but the Commission is violating most of the sections of the regulation. For instance, section 32 subsection two says the regulator should regulate in fairness and balance. But NERC only wants to enforce sections that favour the Distribution Companies (DisCos) and ignore the consumers and other stakeholders. When you talk about electricity theft, you should blame the DisCos. Who is actually the thief in the electricity sector? Electricity consumers spend their money in buying pole, transformer, pay for electricity bills and transformer oil.

These investments are thereafter taking over by the DisCos. Despite this, consumers don’t have meters. DisCos estimate their bills as if they provided electricity regularly in the month. In some communities where they collect estimated bills, they don’t see the light until three days to the end of the month when DisCos come for collection that you see electricity. So, who is the thief here? You’re collecting money for services not rendered and the regulator is keeping quiet. Are they fair to the consumers? The situation where NERC is limiting registered Independent Power Providers because of DisCos is unfair. DisCos are monopolizing the sector.

NERC reportedly sanctioned the operators because they went beyond their jurisdiction. Are you saying operators should go beyond the boundaries allowed by their licenses?
Which boundary is it? Is there monopoly? Now, that brings us to what former Minister, Babatunde Fashola had said. Is NERC supposed to violate the ministerial directives or they are supposed to implement the intentions of the DisCos? If you were present or you have read Fashola’s press briefing on the 9th of July 2018, Fashola quoted specifically that section 71 subsection six of the act did not approve exclusivity. There is no exclusive area for any DisCos and Fashola instructed the DisCos to stop threatening the electricity efforts of others who are supplying electricity to consumers, especially the eligible customers. The electricity gap in the country has to be bridged.

What is your take on the power sector five years after Privatisation?
It is a failure. NERC should even be proscribed. They have failed Nigerians. The regulator needs to live to expectations. While NERC is fair to some segment, the Commission is unfair to some. The Act wouldn’t work if this continues. The investment obligations of the Act are not kept. One is to install 6.4million meters over a 5-year period. How many meters have they installed? What did NERC do? Now, to maintain health, safety and environmental practices, where has it been done? The reduction in number of customers interruption due to network failures, new customer connection and network faults, improving customer services and complaint handling procedures. Now, there is what we call customer service standard performance of the distribution company, which NERC developed. That regulation has not been enforced? It is really unjust to push payment of meters to consumer.

Furthermore, DisCos by their contract terms were expected to make investments at the rate of $357,633,000 per annum from 2013 to 2017 making capital expenditures for the first five years to be $1,788,315,000. What have they invested if the government has been investing in them? You heard Fashola say that DisCos refused to even collect electricity from GenCos. They rather want to be going through NEBT. They wont pay NBET complete, they will come to consumers and be disconnecting electricity. NERC has failed in terms of consumer protection. Section eight of the act talks about consumer protection and licensee of performance standard. Do you know that DisCos are still collecting reconnection fee, which is illegal?

So are you saying the challenge of power theft is not a consumer issue?
It is not actually a consumer issue. If people are aggrieved, they wont obey the law. And if you are supposed to be the one to enforce the law and you begin to disobey the law, there is a tendency that nobody will want to obey that law. NERC has not lived up to expectations. States, local and Federal Government own 40 per cent share in the value of DisCos. Now, how do the local government know what is happening in the power sector? How do the local government relate to NERC? There is no relationship between the states and NERC?

NERC is the major problem. As its stands there is no need to set up the Commission and be giving it the kind of money that they are collecting. Remember that NERC collects money from all the DisCos every month.

Do you support increase in electricity tariff?
There is still a lot that can be done before talking about increase in tariff. If NERC knows what is proper, tariff wont be the immediate challenge. The collection losses is still huge. Power has to be stable. Do you know how much people spend on generators everyday? The figure on import of generators is still very huge. How has NERC tried to organise consumers in the sector? They rather avoid consumers.

We are all buying airtime on our mobile phones. Who is forcing us to buy? Even if they’re exploiting us, we’re not complaining because the service is coming. The zone I come from, every adult male contributes to electricity in the community. In fact, electricity committees are the richest committees in Southeast communities. Because people need the light, they don’t owe, they want to pay. And they take advantage of it and they don’t give them light. And these same people funded the infrastructure of the electricity, so how can they be saying it’s a consumer problem?

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