Why NERC is sceptical about planned review of EPSR Act

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Sam-AmadiParts of the reasons why the Nigerian Electricity Regulatory Commission (NERC) is sceptical about the planned review of the Electric Power Sector Reform (EPSR) Act by the ministry of power was yesterday fully disclosed to THISDAY.

According to a source privy to the ongoing impasse between the regulatory body and ministry of power on the planned review, NERC had from its standpoint as the sector regulator highlighted the possible danger of wrong signal from the planned holistic review of the Act on the ground that the Act had so far not been sufficiently practicalised to warrant such a comprehensive review.

The source stated in Abuja, that apart from the possible misreading of the planned review by global investing communities, the commission also felt that it should not be involved as a participant in the processes leading to the review but more as a watchdog to ensure strict adherence to standards in the process.

To this end, the source disclosed that NERC had in its discussion with the ministry, expressed its reservation to a request by the ministry for Mallam Imamuddeen Talba, who is a deputy general manager within the commission, to chair a committee set up to review the EPSR Act.

“A request was indeed made for Talba to chair a committee set up by the ministry to review the EPSR Act; NERC, however, considered the request and after informal discussion with the minister and permanent secretary in the ministry, it decided to decline the invitation for these following reasons.

It believes that it would not be proper to mix regulatory and policy functions together, that they should be separated. It is of the opinion that the independence of NERC will be at risk if it participates in the exercise. Likewise, the ministry may find itself in an awkward position in terms of providing effective policy oversight,” the source said.

Continuing, the source explained that: “One of the objectives of the EPSR is to establish a regulatory regime that is distinct from policy oversight of the unbundled and liberalised sector. The market players will expect this distinction.

“NERC recommended that the ministry should conduct a review by itself and solicits the views of the commission and other stakeholders. This would be more apt to the responsibilities of the ministry as the sector’s policy maker whose responsibilities should not be shared by the regulator.

“Also, NERC has expressed fears as to the timing of the review. This is a critical stage in the privatisation process with the preferred bidders standing by to take over the successor companies. We should be careful not to create the impression that government is intending to change the game by carrying out a high profile review of the Act.

NERC believes that the EPSR Act has not been sufficiently practicalised to warrant such a comprehensive review. We have not started practising the provisions of the Act on the transitional arrangements before the commencement of a competitive electricity market.

“Since the Jonathan administration, we are now beginning to pay attention to the provisions of the Act. It does not seem right to start now to review an Act that has not been put to effective use and so, NERC has proposed that the minister leads efforts to have a policy workshop of all stakeholders within and outside the ministry to review developments in the sector,” the source added.

The Minister of State for Power, Hajia Zainab Kuchi, had intimated of a planned review of the Act which gives life to ongoing reform of the power sector; she had stated that the eight years old Act was due for review to take into consideration such issues like energy theft.

THISDAY, however, gathered that the planned review was allegedly initiated without the knowledge of the Minister of Power, Prof. Chinedu Nebo.

The source explained that NERC acknowledged that the Act did not make provisions for electricity theft and the intention to criminalise same but welcomed the fact that the Act could be achieved by drafting of a supplementary law to be embedded into the Act instead of a holistic review.

 

Information from This Day was used in this report.