A Review of the Nigerian Energy Industry

Alleged inactive TCN board raises question on status of licence

PHCN20 August 2013, Abuja – The seeming inactive status of the supervisory board of the Transmission Company of Nigeria, TCN, months after it was incorporated by the federal government to guide operations at the transmission company is raising questions on the status of the company’s operational license.

It is understood the inability of the seven-man board of TCN to convene a board meeting five months after official take-off and other anomalies, might have raised suspicions from the Nigerian Electricity Regulatory Commission, NERC, as to the company’s adherence to extant rules and regulation guiding operations in Nigeria’s Electricity Supply Industry, NESI.

Power industry experts have however stated that NERC should not hesitate to sanction TCN even if it remains under government control and any other operator in NESI for obvious misapplication of extant processes in the sector.

But it was learnt in Abuja that NERC in furtherance of its regulatory responsibilities might have requested explanations from the management of TCN as to its operational status with regard to the functions of its board, which is headed by former Chairman of the Revenue Mobilisation and Fiscal Allocation Commission, RMFAC, Hamman Tukur, and assisted by a former Chief Executive Officer of Skye Bank Plc, Mr. Akinsola Akinfemiwa .

NERC as a regulator of NESI makes regulations prescribing all matters, which are required or necessary to be prescribed for carrying out or giving effect to the Electric Power Sector Reform, EPSR, Act 2005. Some of NERC’s regulations that are bidding on operators in NESI include a scheduled regulation on compliance reporting.

The regulation mandates operators in NESI to regularly provide to NERC reports of their operations as they relate to their respective objectives. It is however not clear if the TCN has effectively complied with this request owing to the seeming inactiveness of its board, which has yet to begin sitting.

As part of its responsibilities, the board was supposed to provide supervision to TCN, which had been concessioned by the government to Canadian firm, Manitoba Hydro International (MHI) under an initial three years management contract, expected to reposition its operations.

In compliance with the EPSR Act 2005, this seeming anomaly should attract either TCN’s license suspension or revocation by NERC but after its shareholders (government) must have complained of inappropriate practices of the board and company to NERC.

As it stands, sources told THISDAY that operations at TCN was still at its lowest ebb irrespective of MHI presence. MHI however contended with internal wrangling from sources opposed to its management contract and the government seems unperturbed by this.

NERC’s regulation for licences indicates that an operational license may be suspended or cancelled for reasons relating to the inability of a licencee to fully discharge the functions or perform the duties imposed on it by the terms and conditions of the licence, the Act, applicable legislations, regulations of the Commission, market rules, rules and regulations, and network Codes; default in complying with the terms and conditions of the licence, any decisions or orders of the Commission.

A license may also attract suspension or cancellation if the licensee is carrying out its licensed business in a form and manner which constitutes an immediate threat to public health and safety or the health or safety of any person; or if the licencee refuses to submit itself to investigations or inquiry by the commission or obstructs any officer assigned to do so or fails to produce documents for inspection as directed by the Commission.
Meanwhile, the NERC and an investment framework initiated by the United States of America President, Barack Obama, Power Africa Initiative, have held a meeting to discuss key investments initiatives that could be harnessed for Nigeria industries.
A statement from NERC disclosed that the meeting was at the instance of the Power Africa Group which considers Nigeria a key nation in the scheme of things in Africa. It further stated the Team Leader and Coordinator for Power Africa and Trade Africa, Andrew Herscowits, had lauded Nigeria as an attractive investment destination.

It quoted Herscowits to have said that Nigeria was its model at a goal-oriented drive and implementation, the impact for which can then be replicated in other African countries, adding that NERC could count on its support for specific targeted assistance making its imperative for a sustainable collaboration that would shape the group’s intervention.

The statement signed by NERC’s Assistant Manager Media, Maryam Abubakar, quoted Chairman, Dr. Sam Amadi, to have assured the delegation of better communication and feedback.

Amadi, the release added, noted that Nigeria’s reform of her power sector has been most consistent, stressing that that the reform was moving the electricity industry towards competitive electricity market driven by the private sector.

He also restated the critical role of NERC in the drive for the transformation and advancement of transparency in the sector as its regulator. “The Commission wants to be seen as the regulator that solves problems through consultation,” Amadi said, while requesting for engineering educational support in new technologies for Nigeria’s power sector.

– Chineme Okafor, This Day

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