Tuesday, February 27Inside Business Africa

NERC reads riot act to generating companies

The Nigeria Electricity Regulation Company (NERC), has warned the Association of Power Generation Companies (APGC), against what it described as consistent acts of disrespect.

The Commission, therefore, cancelled the meeting that was to hold on Tuesday, and warned against future occurrence of similar conduct by the association.

NERC was reacting to the call by generation companies (GenCos) to scrap the NERC, saying it is weak, incompetent, lacking in leadership, and unable to perform its duty.

In the latest biannual bulletin, published by the GenCos, the Executive Director, APGC, umbrella body of the over 20 generators in Nigeria, Dr. Joy Ogaji, advocated an “independent and transparent regulator.”

The GenCos argued that an industry without a regulator would be far better than what currently obtains with the NERC in charge.

They said despite the powers bestowed on the Commission, indiscipline and contract breaches were still pervading the electricity supply space with the regulator refusing to act at all or taking decisions late.

The GenCos added that NERC has enormous powers, including the power of monitoring and enforcing non-compliance as enshrined in Section 62 (6) and (7), which empowers it to penalise licensees in contravention of the terms through licence cancellation.

The APGC also said the supply growth from pre-privatisation to date shows that available generation capacity, which was 3,4275MW, has increased by 135.82 per cent to 8,083MW.

But according to them, the Gencos are only allowed to generate 3.972MW, thus losing an average of 4,111MW daily.

They explained that the foregoing shows that they are not faring well, as they have been made to bear the brunt of the “lacklustre performance of the sector.”

“It is therefore unbelievable and puzzling that notwithstanding the overwhelming mandate that is ascribed to NERC, especially under Section 96, the sector is bereft of the impact of a strong leadership.

“The somersaults of regulations and others from the Commission, the lack of a firm monitoring and evaluation framework, absence of market discipline with predominant non-compliance to industry regulations and governing codes all attest to the assertion that the market or sector may be better off without the regulator.

“Sustainability of the sector is hinged on a regulated market led by an independent and transparent regulator, who can ensure that the market is technically and financially viable across value chain; keeping it clear of financial obstacles, benchmarking distributors to reduce losses, and ensuring that the viability of generators is not threatened by fuel prices than may hinder security of supply.

“A regulator should be proactive and reactive at the same time, but more proactive to deal with the dynamics and changes to both local and global factors. Experts however argue that NERC has exhibited more reactive than proactive tendencies in discharge of their duties.

“There is therefore a need for a coordinated approach by all stakeholders in the Nigerian Electricity Supply Industry (NESI), a call for knowledgeable experts and technocrats to find a viable/apolitical solution, encompassing the value chain,” they stated.

But, the NERC believe the constant disrespect of the GenCos malign the regulatory institution and threatens the concerted efforts being made by various stakeholders towards improving the Nigerian Electricity Supply Industry (NESI).

“The Commission duly notes that APGC is not a licensee in the Nigerian Electricity Supply Industry, but it would not be defensible for you to bifurcate yourself from its actions as the APGC has acted as an agent for a disclosed principal that is a licensee of the Commission.”

Source: Guardian

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