Hydroelectric Power Bill Scales Second Reading in Senate


A bill which seeks to reduce the charge imposed on the total revenue generated from the operations of any company operating hydroelectric dams in the country from 30 to 10 per cent scaled second reading in the Senate.

The “Bill for an Act to amend the Hydroelectric Power Producing Areas Development Commission (Establishment) Act,2010, was sponsored by Senator David Umaru (Niger East).

It seeks to amend section 14 dealing with the “Funds of the Commission” provided under the Principal Act.

Essentially, the proposed amendment is intended to: (a) reduce from 30 to 10 per cent, the charge imposed on the total revenue generated from the operations of any company or authority operating hydroelectric dams in any member State of the Commission; and

(b)Validate and give legal backing to the “10 per cent HYPPADEC charge” being deducted from the invoices of companies (GENCOs, DISCOs etc., ) and retained by various government agencies including the Market Operator, the Nigerian Bulk Electricity Trading Plc.( NBET), between 2013 and 2015.

Section 14 (2) (a) of the Principal Act which the Bill proposes to amend provides that “30 per cent of the total revenue generated by any company or authority from the operation of any hydroelectric dams in any member State of the Commission shall be remitted to HYPPADEC as one of the main sources of funds to execute its mandate under the Principal Act.”

Umaru noted that shortly after the passage of the HYPPADEC Act , the 30 per cent charge imposed on the total revenue of brownies (GENCOs, DISCOs, etc.,) from the operation of Hydroelectric dams under section 14 (2)(a) became the bone of contention between investors, market participants and the regulator of the electricity industry, the Nigerian Electricity Regulatory Commission ( NERC) leading to a demand for a downward review of the charge imposed by the Principal Act.

He noted that the demand for the review of the surcharge imposed on the annual revenue of the entities from 30% as contained in the Principal Act to 10 %, was based on the fact that it became impracticable for such a large percentage of the total revenue of hydro-based electricity generating companies to be remitted to HYPPADEC without having adverse effect on the performance of these entities considering the capital intensive nature of the industry and the myriad of problems inherited by these investors following the unbundling of NEPA.

He added that the plight of communities in the HYPPADEC member states remains an issue of great concern to many.

He said, “Host communities have been ravaged by flood, and others afflicted by water “borne diseases, environmental pollution, loss of lives and properties. Communities around Kainji Dam, Shiroro and Jeba hydroelectric dam axes have continued to suffer economic losses as a result of hydroelectricity generation activities.

“Excess water often released from these dams have also affected agricultural activities in communities located around Rafi, Bida, Munya,Lapai and several other places.

“The 10 per cent surcharge imposed on the annual turnover of companies and authorities from the operation of hydroelectric dams forms part of the sources of funds for the provision of infrastructure and other remedial measures to cushion the sufferings of communities of HYPPADEC member states.”

The Niger East lawmaker noted that it is his sincere hope that the passage of the Bill would “resolve one of the major issues militating against the implementation of the Act and thus pave way for the immediate takeoff of the Commission.”

Source: The Nation

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