The Nigerian Electricity Regulatory Commission
The Nigerian Electricity Regulatory Commission (NERC) is consulting with stakeholders to decide whether or not to accept the proposal by state governments to participate in the distribution of electricity in the country.
Rivers, Akwa Ibom, Delta and Lagos States are in the forefront for the deregulation and decentralisation of the power sector to enable their participation in the distribution of the electricity they generate.
As a prelude to that, the National Economic Council (NEC) has invited the Chairman of NERC, Dr. Sam Amadi, to its next meeting to discuss the resolution of the Nigeria Governors’ Forum (NGF) that power be deregulated and decentralised for efficient distribution.
In the presentation made by Amadi at the meeting of the NGF, he said the NERC was consulting with stakeholders in the Nigerian Electricity Supply Industry (NESI) to ascertain the feasibility of the power distribution proposals of the state governments.
Also, available data show that the Power Holdings Company of Nigeria (PHCN) lacks requisite transmission and distribution infrastructure to evacuate the available 150 megawatts of electricity generated at the Omoku Power Station which was inaugurated in 2006 in Rivers State.
Amadi at the presentation also noted that state governments could be allocated equity shares in distribution companies within their locales based on their investment contributions in the maximum percentage of total equity of distribution companies.
He, however, explained that its consultation with stakeholders was hinged on a robust evaluation of such investments in power distribution networks by states which was expected to determine an appropriate
minimum and maximum percentage of equity shares to be allocated to state governments in compensation for their commitments.
The Federal Government had also expressed its willingness to accommodate the participation of state and local governments in the business of power distribution considering their potentials to become shareholders in the successor companies of the unbundled PHCN.
Vice-President Namadi Sambo recently said that both state and local governments that had invested in the generation and distribution of power should be technically considered for certain percentage of equity in the companies to avail them the opportunity of recouping their investments on such projects.
Amadi in the presentation, also enumerated the opportunities available to state governments in the aftermath of reforms in the power sector.
According to him, “States can get involved in the reform by incorporating a special purpose vehicle (SPV) like a limited liability company with state shareholding and separate independent management to ensure power generation, distribution or trading upon licensing from NERC.”
Other options for state government’s participation in power projects as enumerated by Amadi included on-grid and off-grid generation, embedded generation, public-private partnership and renewable energy, which he said, was most suitable for rural development.
Meanwhile, NERC has also developed the draft regulation frameworks for embedded generation and independent electricity distribution networks for vetting by stakeholders in the power sector.
The two documents obtained by THISDAY - Draft Regulation for Independent Electricity Distribution Networks and Regulation for Embedded Generation Bills - submitted to the National Assembly are expected to come into effect as soon as approval for their implementation is got from a resolution of the commission, hence, paving the way for it to be signed and sealed by the chairman of the commission.
Some of the provisions of the documents include modalities for planning a distribution network and connection of embedded generation as well as commercial arrangements as contained in the regulation for embedded generation 2011.
Also in the draft regulation on independent electricity distribution networks 2011 are spelt out modalities for the operation of a distribution network which include the installation and maintenance of the distribution system as well as the determination of tariff and other charges, as the case may be.
He also told the governors that the new tariff for the power sector would either commence in October this year or in January 2012.
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