The Nigerian Electricity Regulatory Commission and the Association of Nigerian Electricity Distributors fight over policy issues in the sector

By Anayo Ezugwu

THE electricity distribution companies, Discos, and the Nigerian Electricity Regulatory Commission, NERC, are engaged in a verbal onslaught with the former accusing the later of not addressing the challenges in the sector. The Discos under the umbrella of Association of Nigerian Electricity Distributors, ANED, have asked the NERC to focus on the N435.7 billion under-recovery by electricity operators in the country rather than being distracted by the activities of the body.

On the other hand,  the NERC has warned the ANED to steer clear of policy directives in the power sector. The commission made the directive during a meeting with representatives of the Discos in Abuja. At the meeting, ANED representatives were warned against commenting on any pronouncement made by Babatunde Fashola, minister of power, James Momoh, chairman, NERC or the commissioners.

In a communiqué issued after the meeting, the commission said ANED is not a recognised legal entity to interface with. “Inter-relationships between Electricity Distribution Companies were encouraged but activities of Association of Nigerian Electricity Distributors are discouraged. A strict adherence to contract agreement signed by the Commission’s Licensees (Discos) was re-echoed as the only binding legal entity that should form the continued relationship between the commission and Electricity Distribution Companies.

“The meeting agreed henceforth that the Legal Counsel of the Electricity Distribution Companies representing ANED should never in whatsoever way interfere with the policy directives or regulatory pronouncements made either by the Honorable Minister of Power or the Commission. That no unwarranted remark should be made by ANED representatives against the person of the Honorable Minister, NERC Chairman or against any of the NERC Commissioner going forward,” it said.

Reacting to this development, ANED in a statement on Wednesday, September 12, signed by Azu Obiaya, chief executive officer, ANED, said rather than dissipate energy on the advocacy work of the association, NERC should be concerned about cost under-recovery and other burning regulatory issues. The association said there was a need to address the widening tariff gap that was hindering the Discos from performing their obligations due to the freezing of the residential tariffs (R2) in 2015 for 18 months, removal of collection losses in 2015 and non-implementation of five tariff reviews.

ANED said it was interested in the urgent reset of the sector through the implementation of the Power Sector Reform Programme in order to stop the sector from bleeding, drive the investment that was critical to injecting efficiency and provide electricity customers respite from the current supply difficulties.

The association stated that it had the legal backing to protect the interest of the distribution companies just like other bodies in the power sector, adding that its activities were guaranteed by Section 40 of the 1999 Constitution of the Federal Republic of Nigeria under the right of association.

“The Discos, with their formation of and membership of ANED, are exercising this right, not different from similar entities along the Nigerian Electricity Supply Industry value chain, such as the Association of Power Generating Companies, Nigerian Gas Association, National Union of Electricity Employees, etc.

“The investors have sunk more than $1.4bn in the acquisition and operations of the Discos to date and our customers seek to enjoy the benefits of the best practices that result from the interaction of our members under the ANED umbrella.”

According to ANED, it represents the Discos with a principal mandate of advocacy to protect the interests of the member companies directly and indirectly the incomes of a 22,000-employee workforce. ANED said its expression or promotion of a viewpoint contrary to that of an established regulation or policy should not be construed as interference, particularly in the context of the workings of an industry with multiple stakeholder interests.

Fashola and ANED have been at loggerheads over the state of electricity in the country. Sunday Oduntan, ANED executive director, had accused the minister of lying on his claims of improved power generation. Fashola had responded by saying he does not recognise Oduntan or ANED because the association is not a licensee in the sector.

– Sept. 14, 2018 @ 16:05 GMT |