19 December 2013, Abuja – The Operator of Nigeria’s Electricity Market (ONEM), which is otherwise known as the Market Operator has disclosed that the reluctance of licensed participants in Nigeria’s Electricity Supply Industry (NESI) to conclude their statutory registration with it was disrupting the seamless operation of the country’s emerging electricity market.
ONEM explained that as part of the nation’s initial challenges in setting up a functional electricity market that is devoid of unwholesome practices that characterised operations of defunct Power Holding Company of Nigeria (PHCN), it is currently having it hard to get licensed participants in NESI to register their existence with it as demanded by extant rules governing the market.
The Executive Director of ONEM, Mr. Jan Bagnall, who stated this yesterday, at a workshop in Abuja, to sensitise market participants on the provisions in the interim market rule that so far, about 50 per cent of participants in the electricity market have registered with it, adding that such a development would hinder the process of the market’s transition into its planned capacity.
Bagnall disclosed that such a registration apathy would adversely affect issues such as a seamless revenue remittance and disbursement framework for the market, stressing the need for all participants to register with ONEM before the commencement of the Transitional Electricity Market (TEM) in March 2014.
“We have to get registrations from market participants. It is extremely important because what we have to do is that we have to get this market going. We have to get people registered so we know where to pay the bills and who to get the money from.
“We do not have that capacity until we have all the market participants registered as per the rules. It is a necessity to get them registered. We do not have that many registrations completed. It is absolutely imperative to get that going and I can’t stress that enough,” Bangnall said.
He further explained: “Registration means that we have to know who to contact, where to contact them, and what their bank accounts are so we can either credit or debit the proper amounts for participating in the market. Gencos, discos and also Nigeria Bulk Electricity Trading Plc, because we are going to want to know what the Power Purchase Agreements (PPAs) are, systems and conditions that we need to operate the system to. It is everything
“As a Market Operator, as an independent Market Operator, we have to know what is going on with the system until we get to a competitive generation. We are not there yet. That is the sole focus of today, as well as to go over what the interim market rules are and what the impacts to the different participants are.”
Speaking on the level of compliance of distribution companies to the November revenue remittance, Bangall said: “My understanding, the last time I heard was that the compliance level is 40 per cent, which is better than it was originally. Before now, some of the market participants are fully registered. Less than 50 per cent have not registered.
“That is why we are having a concerted push. Right now, it is absolutely imperative that they register before TEM. It is a condition precedent to get to TEM. So, we need to have everybody registered before TEM. If they don’t register, that would be pushed back to NERC to see if they can enforce the necessity to register. And that is what it is going to come down to.”
Meanwhile, the Minister of Power, Prof. Chinedu Nebo and Chairman of the Nigerian Electricity Regulatory Commission (NERC), Dr. Sam Amadi, have called for improved remittance of revenue accrued to the market by participants.
Both Nebo and Amadi, who spoke separately on the need for adherence to extant market rules by participants, hinted that government would not hesitate to take the necessary measures in ensuring compliance and non-violation of provisions in the market rules.
They explained that such provisions were aimed at stabilising the market and that their violations would affect the growth of the market and by extension, the goals of government’s electricity sector liberalisation programme.
– Chineme Okafor, This Day