Mohammed Shosanya
The Federal Government,has urged all the 36 state governors in the country to take advantage of the Electricity Act 2024,to build sufficient capacity for the generation,transmission and distribution of electricity to people in their respective states.
The Vice President Kashim Shettima gave the advice on Tuesday in Abuja at a power sector stakeholders interactive dialogue organised by the House of Representatives Committee on Power.
The event was themed: ‘Confronting Nigeria’s power challenge as the nation migrates to a multi-tier electricity market: A legislative intervention.’
The Vice President,who was represented at the event by the Special Adviser on Power to President Bola Tinubu, Sadiq Wanka,noted that the new law would go a long distance in addressing some of the factors working against stable power supply in the country.
He said: “Having the power to regulate electricity activities also means there is a need to build the capacity to ensure competent and independent regulators in each state market. It means states need to take a leading role in attracting investments to recapitalise distribution companies and to ensure a steady flow of investments towards increasing electricity access.
“While state governments can now regulate all electricity value chain activities within their borders, these new powers come with non-trivial responsibilities. Having the power to set tariff policy within state borders also comes with the responsibility of paying tariff shortfalls and subsidies that emanate from these policies. It comes with the responsibility of state governments to guarantee payments to the national wholesale electricity market.”
Lamenting the poor power supply across the country, the Vice President painted a worrisome picture of the situation, noting that “By some estimates, less than 20 per cent of Nigerians have access to reliable energy of more than 12 hours per day while 45 per cent of Nigerians have no access to any form of electricity. He added that as a result, “Households and industries have been dependent on self-generation that is both more expensive and more polluting.”
He also emphasised the need for clarity in the electricity roadmap to boost investors’ confidence in the new regime.
“Investors must have clarity and confidence in the roadmap and timelines for transition and for there to be a base level of standardization across electricity markets. Dealing with different regulatory bodies does not become too cumbersome that can force investors to stay away.
“Similarly, there is a need for us to maintain a level of flexibility in the transition process. For example, transitioning to state regulatory control requires distribution companies to set up state subsidiaries. But this is not a straightforward process. There are complex issues of asset delineation, equity negotiations with other investors in DISCOs and even infrastructure investments required to truly delineate the distribution network of one state from the other.”
He pledged the Federal Government’s readiness to partner with state governments in facilitating the shift towards increased state government participation in the electricity market as envisioned in the law.
Speaking, Minister of Power, Adebayo Adelabu, said there is a proposal for the establishment of three gigawatts of solar energy sources across the 25 states in the north and South-Western part of the country.
“We have investment proposals for establishing 3 gigawatts, which is 300 megawatts of solar energy source across the 25 states in the North and the South West. This is a novel and we believe it will go a long way to solve our power problem,” he said.
He said the country has witnessed the incessant collapse of transmission, attributing the same to a lack of adequate infrastructure.
The Speaker of the House of Representatives pledges to sponsor bill for compulsory NASS, stakeholders consultation
He said critical problems in power sector, value chain must be addressed
“Accordingly, I will sponsor a bill to provide administrative procedures that entrench proper consultation and legislative review of process for tariff setting in Nigeria’s electricity and other public services,” he said while declaring open a power sector stakeholders interactive dialogue/workshop organised by the House Committee on Power.
The intervention by the Speaker is coming at a time when Nigerians are criticising the recent electricity tariff increment.
The Speaker said he would have expected that the forum and extensive consultations would have preceded the implementation of the new multi-tier electricity system.
“Having this consultation now appears to be an afterthought and goes contrary to the Electricity Act, 2024, which mandates consultation with all relevant stakeholders in determining just and fair tariffs,” he stated.
He cited Section 33 of the Electricity Act 2024 as establishing the National Electricity Regulatory Commission (NERC) as a public agency subject to the oversight responsibility of the National Assembly under Sections 80-88 of the constitution.
He stated that Section 34 of the Act specifically empowers the NERC ‘to ensure that the prices charged by the licensee are fair to consumers and are sufficient to allow licensees to finance their activities and to allow for reasonable profit for efficient operation’ and to ‘ensure that regulation is fair and balanced for customers, licensee, investors and other stakeholders.