By Oscarline  Onwuemenyi
The Nigerian Electricity Regulatory Commission, NERC, has called for a deliberate process of winding down of the Power Holding Company of Nigeria, PHCN, as prescribed by the Electric Sector Reform Act 2005.

The Chairman of NERC, Dr. Sam Amadi, who stated this at a workshop for journalists organized by the Commission in Abuja, said the state of uncertainty over the status of PHCN was causing disquiet for investors in the sector.

He noted that, “With the unbundling and compartmentalization of the PHCN into 18 successor companies, the company should have ceased to exist. As a matter of law, the company does not exist; and as a matter of policy, all budgetary allocations or subventions to PHCN should have ceased.”

The NERC Chairman regretted that the confusion surrounding the status of the power company was robbing the sector of some credibility, even as he urged the government to hasten the winding up of the company in order to remove duplicity and create a transparent, credible reform in the sector.

“Indeed, the uncertainty about PHCN’s final date of exit from the market has only created confusion and may affect the drive for investment, which is at the heart of government’s reform of the power sector,” he added.

Amadi noted, therefore, that NERC had begun the process of removing the company from funding considerations, which will ensure that PHCN does not receive any subvention in the multi-year tariff order, MYTO regime as prescribed by the regulatory agency.

According to him, “The Commission has deliberately reviewed the regular allocation made to the ‘PHCN Corporate Office’, and starting from the next MYTO regime which kicks off early next year, such allocations will stop. However, allocations made to the Transmission Company of Nigeria, TCN, and other overt role players in the sector will continue to be reflected in the tariff schedule.

“The reason is that we are fully conscious that what currently stands as PHCN does not participate in any way in the nation’s energy market, and therefore it is not a part of our tariff considerations even as we work hard to drive reforms within the sector.”

He observed that although some staff of the PHCN may have been seconded to the government-controlled Transmission Company of Nigeria, TCN, many of the general staff have been mainly lying idle.

“Perhaps, the authorities could decide to create a complementary service organization out of the structures of the PHCN, which will dedicate itself to providing some unique services to the sector. However, we would not consider the PHCN or any such complementary agency in our tariff schedule as long as it does participate directly in the electricity market in Nigeria,” he stated.

Meanwhile, the Commission disclosed that it has completed the MYTO review, which is expected to be implemented in the New Year.

Explaining the rational for the review, Amadi said the original MYTO-1 methodology had projected that by 2011, the sector would have 16,000 megawatts capacity of electricity generated.