Electricity consumers are calling on the Federal Government to declare a national emergency in the power sector as a result of the unpleasant developments that have characterised the industry, Okechukwu Nnodim reports
The epileptic supply of electricity, unavailability of meters, exploitative estimated bills by power distribution companies and the recent notice of force majeure by Discos, among others, should compel President Muhammadu Buhari to declare an emergency in Nigeria’s power sector, consumers have said.
According to them, the power sector has not shown considerable signs that it will record tangible improvements in the near future despite being privatised four years ago.
Consumers wondered why power distributors had performed poorly with respect to provision of meters, saying that electricity generation and transmission capacities were still not impressive.
They also wondered why power distributors decided to issue a notice of force majeure to the Federal Government through the Bureau of Public Enterprises, a development that was capable of compounding the woes in the fragile sector.
On Tuesday, electricity distribution firms in the country issued a notice to declare force majeure following the declaration by the Nigerian Electricity Regulatory Commission that eligible customers could purchase power directly from the generating companies.
Force majeure is unexpected circumstance that can be used as an excuse to prevent a party from doing something written in a contract.
Commenting on the various concerns in the sector and why it was important for Buhari to intervene, the President, Electricity Consumers Association of Nigeria, Chijioke James, stated that power users across the country were being maltreated by power firms.
James, who is a lawyer and development advocate, told our correspondent that since the privatisation of the power sector, the sector had been enmeshed in series of irregularities and complaints from both operators and consumers.
He said, “On Tuesday, the immediate past Chairman of NERC, Dr. Sam Amadi, confirmed that consumers are the ones that suffer when major players in the sector are involved in a fight or when there are issues among operators in the power value chain. This was why I was blunt in my recent interview on the NTA, where I called on the President to intervene in the power sector.
“The truth is that the Nigerian power sector requires a national emergency. We cannot continue like this, moving round in one place. Now, since the distribution companies have been given licences to distribute electricity to consumers, it presupposes that they have all it takes to do that assignment. And I think it was on that basis that those licences were conceded to them.”
James added, “Consumers are buying meters because they are tired of excuses. They are giving the distribution companies loans in advance through the purchase of these meters. Unfortunately, this has caused double jeopardy for the Nigerian consumer because so many people have paid for meters and up till now they have not been metered.
“Hundreds of consumers call this association from various states to complain that there are no meters despite the fact that they had paid for the meters. This is not fair! Also, the regulator of the sector is not firm. These are some of the reasons why the President must declare an emergency in the power sector, which, of course, is in the interest of the Nigerian economy.”
He further stated that the problem of the power sector was way beyond metering of consumers, adding that the poor supply of electricity, issuance of estimated bills by Discos, complaints of abysmal transmission facility, non-remittance of funds to the market, etc, were killing the industry.
The problems of this sector are just too many. Ask yourself, since the priivatisation, how many of these numerous problems have been solved? Instead of solving them, more keep showing up by the day. We call on the President to act now before the sector collapses and we all suffer more than what we are suffering presently,” the ECAN president said.
On the recent force majeure notice that was issued the BPE by the Discos, James stated that it was a legal matter that should be adequately addressed to avoid a further downward pull on the sector.
He said, “The force majeure notice is a legal issue and I will prefer that the government should allow the regulator that provided the ground rules to deal with the Discos. The ground rules are there because these are legal issues. Looking at it from the legal perspective, Nigeria runs a government that should comply with the rule of law.
“The right attitude will be that government should sit down with all the parties and the key stakeholders and they will all look at what the agreement states. If Discos are the ones defaulting, then government should apply the hammer. On the other hand, if the government is the one defaulting, it must quickly correct the wrong in the interest of the sector and the consumers. Enough of the troubles in this sector!”
On his part, the National Secretary, National Electricity Consumers Advocacy Network, Mr. Obong Eko, told our correspondent that the call for urgent intervention by the President was right considering the prevalent uncertainties in the power sector.
He stated that the power sector was important to the economy, adding that its collapse would severely disrupt economic activities nationwide.
“I don’t think government will fold its arms and watch this sector collapse before our eyes. It is therefore important that the President intervenes in whatever form to save the sector from an imminent collapse, especially when you see how things are going on right now in the industry, the recent being the notice of force majeure by Discos, arising from the declaration of eligible customers by the minister,” he said.
The Minister of Power Works and Housing, Babatunde Fashola, had earlier in the year declared that eligible customers could buy electricity directly from power generation companies, as against buying it from the Discos.
The NERC recently issued guidelines and regulation that would see to the enforcement of the eligible customers’ policy, a development that the power distributors have opposed, arguing that if fully implemented, they would lose their major financially compliant customers.
Reacting to the force majeure notice issued by the Discos while speaking on the sidelines of a consultative workshop for industry stakeholders recently in Abuja, NERC’s Commissioner for Licencing, Legal and Compliance, Mr. Dafe Akpeneye, said the government would not allow the sector to collapse.
He said, “Under no circumstance would we sit down and allow an industry that is critical and affects all Nigerians to delve into uncertainty. The legal issues as they are now are mainly between the BPE and investors in the Discos but NERC is watching very closely and would not allow the market to go under.
“The force majeure declaration arose on the ground of change of law and political issues on the new eligible customers’ regulation that was released a couple of weeks ago. But we need to bear in mind that there was a consultative process and the Discos participated in it.
“The regulations were issued to ensure that we optimise our generation capacity by ensuring that what the Gencos generate can go to customers through direct contract with the Gencos, and thereby bypassing the Discos, but this is not a total bypass because if the Discos’ assets would be used, they would be paid for as well as the assets of the TCN.”
On what the regulator would do if the Discos refuse to rescind their decision, Akpeneye said, “There is a legal process to this. If somebody says he cannot do a business and there is a performance agreement with dispute resolution clauses, we are a country that is governed by the rule of law and we will abide by it.”
The Discos in the force majeure notice to the BPE had argued that the directive on eligible customers and the Eligible Customer Regulations had resulted in a change of law, which would prevent them from fulfilling their obligations under the Performance Agreement they signed with the BPE.
However, in a letter to the Discos, the BPE challenged the assertion by the power distributors, as it stated that pursuant to the Electric Power Sector Reform Act, 2005, it was obvious that the Minister of Power, Works and Housing was empowered to issue the policy directive and specify the class or classes of end-users that would constitute eligible customers.
The BPE also stated that in the same vein, NERC was empowered to issue the Eligible Customer Regulations.