NERC commissioner wants regulatory economics introduced in university

NERC commissioner wants regulatory economics introduced in university 

Lagos, Dec.1, 2023 

Mr Dafe Akpeneye, Commissioner, Legal Licensing and Compliance at the Nigerian Electricity Regulatory Commission(NERC),  on Thursday wants regulatory economics introduced as a course into Nigerian universities.

Akpeneye said that this would help to build local capacity in the power sector.

He made this call during the 14th PwC Annual Power and Utilities Roundtable Conference with the theme: The Electricity Act 2023, Powering Nigeria in Lagos. 

The commissioner said that the laws in Nigeria today that could handle a power sector transaction, end to end, with skill and capacity building were very few.

"So, we need to build local capacity along the lines of everything we do in the sector.

"No university in Nigeria teaches regulatory economics and what we do in the sector is regulatory economics so we need to start building our local capacity towards doing these things locally," he said.

Akpeneye also noted that Nigeria had no dedicated funding institution skater mainly for the development of the power sector.

He cited that India had a dedicated power bank that was a bank established and responsible for dealing with funding and issues regarding the power sector in India.

"So, our sector being a critical sector to the country needs to have a dedicated institution to funding the needs of the sector both short and long terms goals.

"We also need to create an environment where investment can come in and mature," the commissioner said.

Akpeneye said that it was important to have an all encompassing law that ensures coordination, ensures a robust relationship between the regulators, the standards and how the people work together.

"The government, electricity discos and energy stakehders need to work together and determine what we are capable of doing and devise a strategy on how we can get there.

"Our job requires the fact that we have to get power to very nook and cranny of this country.

"So, we have to design modules that work within our situation context," he said.

The Commissioner for Energy and Mineral Resources, Ondo State, Mr Razaq Obe said that modules to be designed should be done in such a way for easy repeatition in other states.

"We can not just have all manner of models everywhere, it must be created in such a way that if it works, it will work in Ondo, Kaduna and other states.

"Perhaps, if for some specific reasons there will be any change to it, it will be tailored across all the states because you can not grow an economy if your power consumption is low," Obe said.

The commissioner noted that a lot of people still believed that power was supplied by the government therefore they don't feel pressured to pay for it not knowing that power distribution had been privatised.

However, he said that states could do a lot by reactivating orientation organisation so that people would understand the purpose of getting metres and paying for electricity supply.

"If we get every home metred, the disco will not have to ration as they do today and they will be able eventually do away with estimated billing," the commissioner said.

Obe said that ministry of energy did not exist in Ondo State until 2021 ditto other various states noting that everyone was beginning to see the importance of the sector.

Mrs Folake Soetan,the Chief Executive Officer, Ikeja Electric Plc., said that the issues that discos had today was energy theft, cost of operation and being able to recover the cost among other problems.

Soetan also said that the ability to attract funding to improve the current infrastructure was another major issue because investors needed to be guaranteed returns on investment.

"A lot of people actually want to invest but their fear is a presence of an enabling environment which will allow them get a return on their Investment.

"The states and the discos need to collaborate to make sure that there is terms with regards to anything theft which is a huge problem in the disco space today.

"So, this is an opportunity for states to ensure that they create that enabling environment and a commercial framework that attracts that type of investment in the sector," she said.

According to Soetan, on the contrary to people's belief, electricity discos actually want to provide metres to every household because it was more efficient and saved cost of operation.

"People feel the discos do not want to metre houses not knowing that it is more difficult to recover the cost of energy that is estimated.

"When you have a metering devise you can account for energy, investigate energy theft, it guarantees collections for the particular month and you programme outstanding bills on that meter.

"It is more difficult to run on estimated bill than metred bill and there has been a direct impact on our collection performance since we metred houses," she said.

Mr Ugochukwu Obi-Chukwu, Chief Executive Officer, Nairametrics, said that for the electricity act to work properly it needed to deliver three key components.

Obi-Chukwu said that the act needed to deliver 24/7 power supply, address the issue of estimated billing squarely and also deliver cost protective tarrifs for investors to be attracted to the sector.

"However, the act is a step in the right direction which I believe will create an avenue for investment in the sector.

"Investment in the power sector is very expensive but once there is incentive from the state government it will be easy to attract investment to their states.

"Investment can be attracted through tax incentives, setting up power plants or giving lands to investors," he said.

Obi-Chukwu said that it was one thing to invest millions of dollars in power generation and distribution within your state and another, to actually recover that cost of investment.

"So, you will have to create an environment that will allow power to be affordable and that will allow people invest in power within their own state to recover the value of investment made," he said.

A partner with West Market Area, Energy Utilities and Resources Leader, Price Waterhouse Coopers International Limited (PwC), Mr Pedro Omontuemhen, said that Nigeria could not develop economically without power generation, distribution and transition.

Omontuemhen said that there were three countries in Africa doing very well in terms of power generation which he mentioned as Ghana, Kenya and Ruwanda.

"So, if Nigeria is going to develop economically then we can not run away from power generation, distribution and transition.

"There is need for huge investment in the sector across all the value chain and we are hoping that the Electricity Act does provide that enabling environment that will bring investors into the country," he said.