A Review of the Nigerian Energy Industry

Nigeria to give states right to genererate, distribute power

6 December 2011, Sweetcrude, Abuja – The 36 state governments of Nigeria would be given the statutory right by the Federal Government to generate and distribute power as from January 2012.

Disclosing this in Abuja, Monday, chairman of the Nigeria Electricity Regulatory Commission (NERC), Dr. Sam Amadi, said this would be actualised when the commission’s new set of regulations guiding Independent Electricity Distribution Network Operators and Power Generators becomes operational.

Currently, the Federal Governmnet has the exclusive right of power generation and distribution for commercial purposes, except for some companies that NERC licensed to produce limited power for their industrial applications.

But, Amadi, who spoke at a stakeholders’ workshop on the review of the Independent Electricity Distribution Network draft regulation, stated that with the take off of the new regulations in January, it is expected that states with the capacity to generate power in their domain will apply for right for operations in the power sector.

Explaining how things would work underthe new arrangement, Amadi said: “All the cost associated with transmission is bypassed. It is embedded with the distributor locally. It can cure acute shortages of power in the short and long run. A state that has the capacity can have partnership with private sector, set up a power plant to carter for the need of the state.”

According to him, the new regulation is a result of the agitation by the states for the removal of power from the exclusive list.

He cited Governor Rotimi Amaechi of Rivers State as one of the governors, who had been seeking that states be allowed to generate their own power to help lift the country from power crisis.

“Instead of running parallel lines running through the cities, you can have power embedded in your state, if you have enough capacity. For instance, Rivers has sufficient capacity. Instead of taking it to the grid, you can have power embedded in the state and the surplus you can sell to the grid if you like,” he said.

He added: “What is required is that you have sufficient capacity to distribute that power. That is why we are bringing these new regulations. The cost of evacuating power to the grid and later transmitted back for use locally will be removed.”

The NERC commissioner, Legal and Licensing Services, Mr Steven Azinge, said the draft regulations are a product of painstaking effort with input from experts and relevant stakeholders.

He said a window of three weeks will further be opened to receive comments and suggestions from stakeholders for more input to improve the document.

He said the final regulation would be sent to the Ministry of Justice for gazzeting, while the regulation will come into force by January.

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