A Review of the Nigerian Energy Industry

Ignoring NEMSA, NERC hires 14 to inspect electricity firms

26 June 2015, Abuja -The Nigerian Electricity Regulatory Commission (NERC) Thursday sidestepped the existence of a technical inspector, the Nigerian Electricity Management Services Authority (NEMSA) that was recently signed into law to undertake technical inspections in the country’s electricity industry and appointed 14 consultant technical inspectors for the sector.

nercThe 14 inspectors who were inaugurated in Abuja by NERC are expected to monitor performances and compliance levels of electricity firms in the sector with extant market rules made by NERC.

“The Act is clear on what we should do and that is what we are doing.  A new government is in power and they have to advise us on what to do.

“We are an independent commission under government, we expect that government will look at the laws and take a position. But for now it is so; even if the new agency takes off, it doesn’t stop the work that NERC does,” Chairman of NERC, Dr. Sam Amadi, said at the sidelines of the inauguration of the inspectors.

Amadi further said: “Technical regulation is intrinsically related to commercial or economic regulation because we would need to base our commercial activity and intervention in the market with technical data that we have.

“You cannot talk about tariff without talking about incentive regulation, and performance. We don’t see any problem as it is clear that NERC clearly opposed the regulation because in our view, it was faulty and unnecessary.”

He explained that electricity inspection remained a vital function of the regulator as it informs sensitive decisions in reviewing electricity tariff, adding that the 14 inspectors drawn from private electrical firms would be stationed in each of NERC’s distribution zones.

The appointment of the inspectors is coming at a time when NEMSA was established by an Act that was signed into law last month at last days of former President Goodluck Jonathan.

NEMSA transformed from the Electricity Management Services Limited (EMSL) which was started in 2013 to fill the gap in technical inspection. NEMSA’s Managing Director, Peter Ewesor, recently said  the new agency will interface with market operators to inspect and test electrical equipment and facilities while ensuring that operators comply with NERC rules.
But Amadi in his remarks at the inauguration stated:

“The Electric Power Sector Reform Act (EPSRA) 2005 says NERC will do inspection, it allows the regulator to appoint inspectors to do the work.

“In its provision, there is an obvious link between economic regulation and technical inspection because it is the result of technical inspection that will feed into economic regulation.”

He decried the absence of a clear technical regulatory framework in the power sector, adding that there are many other codes and rules including the metering and grid codes.

“What is left is the technical capability to monitor, inspect and find out how the codes are being implemented and the inspectors report to the commission so that the commissioner can regulate better,” he noted.

He said: “These are technical firms that have experience and their duty is to support, investigate and do the work. They are 14 who are to do the work while our zonal offices monitor and evaluate them.”
NERC also dismissed claims that it was creating double technical regulatory apparatus in the power sector.

Amadi in this regard faulted the emergence of NEMSA, adding that in Ghana where the economic and the technical regulator are in place is currently under chaos over tariff making.

“Clearly, it is wrong, to have double regulation. The NEMSA law has been signed but it has not been operationalised, so it is left for government to review and advise us on what to do. I do know that government’s policy during its campaign was not to recognise any other regulator apart from NERC,” he said.

According to him: “For us, we are doing our work as spelt out in the NEPP of 2000 even before there was NERC.  It intelligently stipulated that the commission will do technical and commercial regulation.

There is an example in Ghana where an attempt was made to divide them into jurisdiction and it resulted in chaos because the economic regulator issues tariff and the other regulator counters it.”

– This Day

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