By Daniel Idonor
ABUJA — DETER-MINED to lay a solid and sustainable foundation for a viable power sector, President Goodluck Jonathan, yesterday, announced the immediate commencement of the review of the current Multi-Year Tariff Order, MYTO.

According to him, government has also embarked on the process of liquidation of Power Holding Company of Nigeria, PHCN and full commercialisation of the various operating companies established to succeed PHCN.

It has also the establishment of a lifeline tariff specifically for  urban poor and rural dwellers of the nation and constitution of a Power Consumer Assistance Fund, through which the system of lifeline tariffs will be administered.  He expressed optimism that with continued focus, the government will achieve its desired goals.

Late President Umaru Yar’Adua had in April 2008, took a major step towards attracting required investment for the rapid development of Nigeria’s power supply sector with the approval for the implementation of a new Multi-Year Tariff Order, MYTO, with effect from July 1, 2008.

The introduction of  MYTO, according to government then, was to boost the confidence of lenders and investors alike in Nigeria’s power sector and provide for reasonable returns on capital investment, and the correct pricing of power, which will, in concert with other measures adopted by government, facilitate an orderly transition to a much more efficient and reliable market-oriented power-supply system.

The government had accepted that consumers would not immediately have to pay more for electricity under the new tariff order as the Federal Government would establish a MYTO Support Fund to cover the power sector’s revenue shortfalls during the three-year transition period that will begin on July 1.

The sum of N64.84 billion was then approved to fully subsidize electricity consumption by Nigerians in the 2008/2009 period. Government was to further provide N77.41 billion in 2009/2010 and N35.80 billion in 2010/2011, making a total of N177.95 billion in electricity subsidy over the three-year transition period.

Inaugurating the Nigerian Electricity Regulatory Commission (NERC), Jonathan affirmed that his administration will encourage and support it in the execution of its responsibilities in the spirit of the legislation under which it was established.

He pointed out the importance of the Commission which has a vital role to play in providing the enabling regulatory environment that will support the private sector players to invest and operate in an efficient and responsible manner even as government takes steps to protect the populace from unwarranted exploitation.

He said “Without doubt, a strong and fair regulator is the foundation for the successful management of the power sector”.

President Jonathan said the inauguration of the Commission was a significant milestone in his administration’s management of the ongoing evolution and reform of the industry.

The President that the Senate for confirming the Commissioners, and said the National Council on Privatisation (NCP) has flagged off the various processes that will lead to the encouragement of private sector involvement in the generation and distribution sectors of the industry.

He stressed that it was close to concluding a management contract for the Transmission Company of Nigeria, “which is crucial to the stability and sustainability of private sector participation in generation and distribution”.

Besides, he said with the invaluable support of the World Bank Group, various instruments were being developed to mitigate the regulatory and payment risk around these transactions; “and, equally important, the industry itself is about to move into the Transition state of market development, a period envisaged by the National Electric Power Policy during which trading will be more commercially_oriented and based on firm bilateral or special contracts.

“Government has embarked on the review of the current Multi_Year Tariff Order; the process of liquidation of Power Holding Company of Nigeria (PHCN), the full commercialization of the various operating companies established to succeed PHCN; the establishment of a lifeline tariff specifically for the urban poor and the rural dwellers of our Nation and the and the constitution of a Power Consumer Assistance Fund through which the system of lifeline tariffs will be administered. We are most optimistic and expectant that with continued focus, this government will achieve its desired goals in laying a solid and sustainable foundation for a viable power sector”.

He said further that the Commission was established by an Act of the National assembly with the primary objectives of maximizing access by all Nigerians to electricity supply that is adequate, safe, secure, reliable and fairly prices via the creation, promotion and preservation of efficient electricity market structures that are overseen by regulation that is sustainable and balanced for consumers, licensees, investors and other stakeholders.

“Only in this way can we ever hope to achieve the objectives set out in the Nigerian Electric Power Policy, 2001”.

The President therefore charge the Chairman and the Commissioners to resolve to use all policy and legal instruments at their disposal to ensure that the full objectives of the regulation of the Nigerian Electricity Supply Industry are achieved in a transparent, fair and balanced manner to the benefit of all.