Africa Business News: Entrepreneurs. Investments. Banking & Finance. Emerging Markets. Start-Ups
Wednesday, 3 September 2014
Regulatory Tussle Threatens Power Sector Reform
Dr Sam Amadi
The battle for the soul of the regulation of the nation’s fledging electricity industry is presently tearing the sector apart as the chairman of the Nigerian Electricity Regulatory Commission (NERC), Dr Sam Amadi, has insisted that the NERC remains the sole regulator mandated by law for the sector.
Amadi made the remark yesterday in Abuja, in reaction to a bill currently before the National Assembly for the setting up of a parallel regulatory agency for the power sector, during the opening of a public hearing on the commissions draft “Nigerian Electricity Supply and Installation Standards (NESIS) Regulation.”
The bill which has passed first and second reading at both the House of Representative and Senate is sponsored by the chairman, House Committee on Power, Patrick Ikhariale, and seeks to upgrade the Electricity Management Services Limited (EMSL) to Nigeria Electricity Management Service Authority (NEMSA) and cede to it technical regulation of the sector which NERC said was part its responsibilities.
But NERC’s position was challenged at the hearing by the EMSL which claimed that NERC was trying to arrogate to itself function reserved for the Electricity Inspectorate Services (EIS) of the ministry of power which was transferred to EMSL in 2013.
However, in his presentation Amadi said: “It is pertinent to recognise that the National Electric Power Policy (NEPP 2000) and the Electric Power Sector reform Act (ESPR) 2005, which are the guiding spirit for the power sector reform unambiguously, mandate the Commission as sole and independent technical and economic regulator of the Nigeria Electricity Supply Industry (NESI).
“Today we are conducting public hearing on another very important technical regulatory instrument (NESIS) developed by NERC in fulfilment of its mandate to ensure effective technical regulation for reliability and safety in the NESI,” he said.
“I will like to categorically state here that there is no gap whatsoever in technical regulation in NESI as being alleged. The Commission has put in place several regulatory instruments to address technical and safety issues arising from across the electricity supply chian in generation, transmission, distribution and utilisation.”
He added that the new document which shall guide operations of the power sector and replace out-dated ones was developed in line with international best practices and standards, while listing other regulations so far developed to include; the Grid Code, Metering Code, Distribution Code, HSE Code among others.
Meanwhile, EMSL representative, Jide Olagunju said the EPSR Act of 2005 never envisaged that NERC would be “climbing electric poles” to ensure standards.
He argued that rather “NERC would set the standards for the government agency established to climb poles and do other technical inspections and certification, namely, EIS”.
He added tha “If the proposed NESIS regulations 2014 are passed as presently formulated, EIS would cease to exist as a legal entity. In effect the proposed NESIS regulations 2014 is designed to proscribe EIS” he insisted, adding that the word “inspector” as used in the EPSR Act 2005 “should not be read to mean that NERC, which is essentially a commercial regulator, can do technical regulation.”