By Ediri Ejoh

THREATENED by the usurping of some of its statutory functions, the Nigerian Electricity Regulatory Commission, NERC, has described the establishment of the Electricity Management Services Authority, NEMSA, as an unhealthy rivalry, and unsuitable for the country’s fledging power market.

In a telephone conversation, Chairman of NERC, Dr. Sam Amadi, told Vanguard that Nigeria’s emerging electricity market is not ready for an unhealthy rivalry amongst regulators.

He argued that the establishment of the controversial NEMSA may derail the regulator from its responsibilities to the power sector, as the new agency is a mere duplication of roles.

He, therefore urged the government to allow the electricity sector gain the much needed momentum to propel it to the next level of its development rather than seeking to destabilise it with other forms of regulation. Former President Goodluck Jonathan’s signing of the NEMSA Act, has been widely criticised as whittling down the regulatory functions of the NERC.

Consequent upon signing the Act on May 26th, the former president granted power to NEMSA to provide technical regulations and inspections in the Nigerian electricity market, thereby usurping the regulatory control hitherto enjoyed by the NERC as enshrined in Section 32 of the Electricity Reform Act 2005.

Technical regulation

Rushing in defence of the Commission’s capacity to effectively regulate the industry, Amadi said: “The National Electric Power Policy, NEPP 2000, and Electric Power Sector Reform Act, EPSR Act 2005, which are the guiding spirit for the power sector reform unambiguously mandated the Commission as the sole and independent technical and economic regulator of the, Nigerian Electricity Supply Industry, NESI.

“At this point, I must correct the wrong impression being created by some people that there is no effective technical regulation of the NESI. “It is not valuable to the system, among all the issues surrounding the sector and the country; I am standing on my point that it is duplication.”

Against this backdrop, he maintained that “The new bill is capable of distracting the Commission from its core mandates, causing disharmony and derailing the progress made in the power sector. “NERC has put in place several regulatory instruments to address technical and safety issues arising from across the electricity supply chain.”

He therefore insisted that the transparency and independence exhibited by NERC had earned the sector its inherent level of confidence, thereby boosting in the inflow of local and foreign investors into the sector.

Competition is good for the industry

However, analysts of current developments in the power sector are of the view that competition will promote healthy regulation of operations in the industry.  According to Mr. Odetola Seyi, a United Kingdom based economic analyst, the introduction of NEMSA as a regulatory authority is necessary to check extant gaps in the technical regulation of the electricity industry.

He noted that the functions and operational mode of the agency would streamline regulatory roles in such a manner that will ensure that the substandard equipment are not allowed into the country. Also commenting, Mr. Olubunmi Martins, who is also an energy expert, said the introduction of another body to regulate the activities of the power sector is crucial as it would consolidate on the gains recorded in the power sector.

He said the decision to set up another regulatory agency is in line with international best practices, adding that the United States also has similar agencies that perform such roles. According to him, “It is important to have a parallel regulatory agency specifically set up to monitor the activities of the operators especially in the area of management oversight and performance.”

He argued that oversight monitoring has been lacking in the industry since the sector was fully privatised a couple of years ago. He added that NEMSA will pre-qualify companies that import electricity equipment into the country in order to check sub-standard equipment.

NEMSA Act

By the Act, NEMSA becomes the technical regulator and enforcement institution in the Nigerian Electricity Supply Industry, NESI. Accordingly, it has also taken over the Electricity Inspectorate Service, EIS, a department previously located in the Ministry of Power, which responsibility was transferred to NERC under the ESPRA Act 2005.

NEMSA will also acquire the staff and assets of the current Electricity Management Services, EMS Plc, which hitherto served as a utility service provider to the defunct Power Holding Company of Nigeria, PHCN. The agency was constituted to engage in such ancillary services like meter testing amongst others in the sector.

Clause 6, Part 2 of the Act contains a list and description of 26 different functions, including:

• Standard setting – “to specify technical standards for electrical plants;
• Inspection – “to regularly carry out periodic inspection, monitoring, and assessment;
• Enforcement – “to ensure that power systems and networks put in place have been properly executed; and,
• Provision of services – “to provide comprehensive technical support services that will guarantee the efficient production and delivery of safe and reliable power supply and general industry development activities.

Duplicating NAPTIN’s function

Furthermore, part of NEMSA’s function to “promote measures for advancing the skill of persons engaged in the NESI” is also seen as duplicating the role of the National Power Training Institute of Nigeria, NAPTIN. Agreeing, the Director General, National Power Training Institute of Nigeria, NAPTIN, Mr. Reuben Okeke , however noted that this aspect “was never mentioned all through the public hearing.

It is actually duplication, as NEMSA cannot be involved in capacity development. NAPTIN is an Agency under the Federal Ministry of Power established since 2009 by the National Council on Privatisation, NCP, and registered by the Bureau of Public Entreprises, BPE, specifically for capacity building and training of all workers in EPSI both technical and non-technical.”

According to him, “Before the bill was passed into law, there were public hearings from all involved in the power sector. However, the role of the Act is to ensure that the power sector is rid of substandard product that would undermine efficiency in services delivery.

“While it shields the sector of that, NAPTIN, on the other hand is saddled with the responsibility to empower personal with the technical know-how of maintaining such assets . Those who would work in the power sector are going to be trained by NAPTIN.”

He noted that without the training of personnel, there will be no expertise in the power sector. Admitting that the Act is a necessity, as it will liberate the country from fake equipment, Okeke said: “we are in a country with people who do not care about lasting benefit but immediate enriching of ones pockets despite the effects. As such, NEMSA is strategically placed to ensure that standard equipment are used for electrical installations, and that they also meet international standards.”