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NERC, EMSL rivalry threatens power sector reforms

By BusinessNews Staff on July 18, 2014

Indications have emerged that the country’s nascent power sector reforms are under serious threat as a result of the supremacy battle between the Nigerian Electricity Regulatory Commission and the Electricity Management Service Limited.

The rivalry between both agencies manifested at the National Assembly on Thursday during a public hearing by the House of Representatives Committee on Power on a Bill for an Act to establish the Nigerian Electricity Management Services Authority.

If passed into law, the NEMSA Bill will empower the EMSL to carry out some functions, which NERC says will overlap with its duties as the regulator of the power sector.

While the Ministry of Power, EMSL, Senate and House committees on Power and the Standards Organisation of Nigeria were of the opinion that the bill would empower the electricity management company to ensure standards in the sector, NERC argued that the company’s functions as proposed in the bill would conspicuously conflict with its roles and that of other subsisting institutions.

The Chairman, House Committee on Power, Mr. Patrick Ikhariale, gave reasons why the bill, which has passed first and second readings, was important and how it would impact on the economy.

He, however, did not state whether or not it would cause overlapping of functions between the agencies.

Ikhariale said, “The essence of this bill is to bring about an alternative that will be highly involved in ensuring technical conformity, safety regulation and adherence to best practices.

“The principal role of this agency is, therefore, enforcement of technical standards, inspection, testing and certification of electrical equipment, materials, power systems and networks, to mention a few, in the Nigerian electricity supply industry.”

Sensing the possibility of a disagreement, the Permanent Secretary, Federal Ministry of Power, Mr. Godknows Igali, who stood in for the Minister of Power, Prof. Chinedu Nebo, pleaded for more time to allow the ministry and the agencies reach an agreement on the enactment of the bill.

His plea, however, was belated as the committee chairman insisted that the hearing must continue and that the differences between both agencies on the bill must be made public.

Igali explained that the function of inspecting electrical installations in the country was not fully undertaken by any department or agency of government.

He said the Electric Power Sector Reform Act, 2005 made it clear that the function of inspection of materials was to be domiciled in the ministry.

According to him, the inspection of power equipment is given to the Electricity Inspectorate Services Department, adding that further consultations had suggested the transfer of the EIS to the EMSL, a development which was sternly countered by NERC.

“For us to focus on policies in the sector, the ministry wrote to the Head of Service asking for permission that all the members of staff of the EIS department, which is under the ministry, should be transferred to this new organisation so that it can function on its own. That was approved and that was when we started making budgetary provisions for the agency,” Igali said,

The atmosphere at the hearing was tense as the Chairman/Chief Executive Officer, NERC, Dr. Sam Amadi, made his presentation in which he said that the bill would “not serve the country and its nascent power sector reforms any useful purpose.”

Amadi, who stated that NERC was not contesting the right of the legislators to make laws, added, “This bill will retard the progress of the reforms. This bill, many years after we have left our roles, may leave an undesirable effect. And I will ask the honourable members to take deep consideration of this bill.”

He told the gathering that the transfer of the services of the EIS to the EMSL was in sharp contrast with the provisions of the ESPR Act, which empowered NERC to carry out the functions of inspection and certification.

“Any transfer of EIS services to the EMSL, with due respect honourable members, is in violation of the EPSR Act because those services, by your (House of Representatives) own laws, have been transferred to NERC,” Amadi added.

Meanwhile, the private sector led power generation and distribution companies are performing less than 50 per cent below expectation, the Operator of the Nigerian Electricity Market has declared.

[Punch]

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