Why Geometric Dispute with Interstate is Unresolved

Fri, Jul 31, 2015

By publisher

5 MIN READ

– 

THE Nigerian Electricity Regulatory Commission, NERC, is waiting for a nod from President Muhammadu Buhari to wade into the dispute between Geometric Power and Interstate which has been stalled by lawsuits

THE Nigerian Electricity Regulatory Commission, NERC, last week said the long drawn dispute over the 20-year lease granted to Geometric Power Aba Limited to generate, transmit and distribute electricity in the Aba and Ariaria business districts of the Enugu electricity distribution network would have been sorted out if not for the subsisting lawsuits filed by the contending parties.

Sam Amadi, NERC chairman, said in Abuja that long before the expiration of the term of former President Goodluck Jonathan, he (Jonathan) had granted his consent to determine the dispute, using its regulatory powers but that his initial efforts were bungled by the lawsuits.

Amadi stated that the commission had quickly acted on the presidential consent, and first move to set up a public hearing in line with standard regulatory practices, but had to subsequently pull back following a notice of existing lawsuits by the contending parties.

But in an update on the dispute and what the commission would likely do next to resolve it, Amadi explained to journalists that the issue was discussed in the commission’s last management meeting, with a resolve to revisit it based on approval of the new government of President Muhammadu Buhari.

According to him, a quick resolution of the dispute would reinforce NERC’s policy to encourage investment in embedded power generation in the country. He noted that as it obtains in other climes, lease dispute is best resolved through the regulator of the sector, adding that for the sake of NERC’s new push to encourage investment in the embedded power generation, it hopes to quickly end the matter for public good.

“With regards to Aba and Interstates, NERC has always being transparent and very open. After the sale of the assets to Interstate and Geometric Aba Power protested, we did three things; we set up a committee to go to Aba and verify what they have done, Geometric is our licensee, don’t forget, for generation and Aba power has a distribution licence too.

“The committee wrote a report and we forwarded to the Bureau of Public Enterprises, BPE. We also did the valuation for the whole of Aba distribution area. We are the regulator and we should know the asset by valuation of the asset, but before we could take an action on that, they had gone to court and remember NERC was not primarily involved in the privatisation,” Amadi said.

“But as a regulator, our concern was more about operations of the network and Geometrics as our licensee, we needed to make sure that their claims were true. The letter that is trending in the papers today was written when Interstate took over the distribution network and it was simply, saying that there is a lease that needs to be operationalised but in operationalising the lease, it means for us that we want power to come to the people and Enugu Disco and Interstate should operationalise the lease,” he said.

Shedding more lights on the efforts of the commission to solve the dispute, Amadi said: “The former President Goodluck Jonathan asked NERC to step in and that we are the ones that can arbitrate this issue. NERC tried to do that first by scheduling a public hearing but we got letters from the actors saying that the matter was in court and we could not continue the process.

“We stopped and I wrote back to the president to intimate him that we were committed to determining the issue but that there were letters from the ministry and the actors, saying that there was a court case on it, and that NERC would not want to contravene any court case or process. We believe, however, that the matter is best resolved by the regulator, because these are our two licensees and under the law, the regulator has the right to insist on full service.
It is best resolved if we look at the licenses and reshape them based on public interest and I have insisted that we must have to initiate a public hearing before we can go into the matter as practiced all over the world,” he said.

“We call the parties to make their cases and we also invite experts to advice. Whatever decision we take then will be backed by law because they are our licensees and we are primarily responsible to determine the jurisdiction of the licences. The law says that no licence is exclusive and NERC can change the license based on public interest. The key thing here is public interest and the only way to gain that is to go through a public hearing,” he added.

Speaking on its need for government’s approval to revisit the issue, Amadi noted: “We played safe before now but under the new dispensation, if we are re-authorised to look into the matter, we will. We revived the issue in our last management meeting because it is important in the light of our embedded generation, micros-grid initiative and so we said that we still want to go back and revisit the issue but then we want the government to be fully re-established.”

|