The recent suspension of the eligible customers’ operations by the Transmission Company of Nigeria (TCN).
The confusion stems from the seeming legality surrounding the action and the implications it would have on the Nigerian Electricity Service Industry (NESI),it was gathered
The eligible customer regulation was developed by NERC to facilitate competition and access to electricity supply for unserved or underserved high-end users in Nigeria.
Introduced in 2017, it specifies the classes of end-use customers that will be able to directly purchase electricity from licensees other than the sole incumbent distribution licensees, the Distribution Companies (Discos). The eligible customer policy allows the generation companies (GenCos) to sell power directly to consumers without passing through the electricity Distribution Companies (DisCos
Due to the Nigerian Electricity Regulatory Commission’s directive, the TCN heeded and suspended the transaction.
The TCN had last week written to communicate the compliance to all the eligible customers.
Its market operator, E.A. Eje notified the commission in a letter titled “NERC’s Directive to Suspend Eligible Customer Transactions without the Commission’s Approval”, with reference no: TCN/MO/003/071/002/2021.
It said: “Following a letter from the Nigerian Electricity Regulatory Commission (NERC) dated 7th July, 2021, the commission ordered the suspension of all Eligible Customers transactions without its approval.
“In a subsequent meeting with the commission on 30th of July, the commission further directed the suspension of all Eligible Customer transactions without its approval.
“In the letter, NERC directed TCN to forthwith stop all Eligible Customer transactions pending the conclusion of the review and approval of the respective applications for eligible status by the commission.
“In this regard, we write to formally notify you that the MO/TCN is abiding by this directive and will credit all affected Eligible Customers associated energy to their host DisCo, we advise that all Eligible Customers follow up their license application with the commission.”
But the electricity distribution companies in the country have kept mum over the action of the regulatory body.
Sunday Oduntan, Spokesman of the electricity companies responded to Daily Independent’s enquiry on the implications of the action with ‘no comment’ response in apparent aversion to the action that may whittle down the influence of the power distributors in Nigeria
Adeola Samuel, the President of All Electricity Consumers Protection Forum, told Daily Independent there was need to be guided by the content of the law per the current action on the eligibility customers’ transaction.
According to him:’’The question to ask and find an answer for is” what did the law say about this issue?” Then, the next question is “why go against the law”.
“The right thing to do is follow the law and what it says otherwise any other action is a”bypass” which is illegal. So my advice is that the stakeholders desiring to implement their wish should move to amend the law. Otherwise, if NERC’s action follows what the law says, then so be it and let the aggrieved do the lawful needful.
“The question I have here is that has the section 27 that empowered such move be amended or remove the provision? This is things done by NERC that attracts endless litigation. Let the affected go to court and ask for mandamus order to restore status quo immediately.
Electricity is a right not privilege and can be and must be obtained from multiple source not necessarily the source of NERC
The law that make provision for eligible customers to directly source fir power directly is to break the near monopoly being experience in power sector by the discos, hence, those that have suffered the neglect and near darkness yet paid for it at the months now heave sigh of relief.
Whatever informed such directive cannot be said to be altruistic Due to the monopolistic tendency of discos in their franchise area, they are not expanding neither are they seeking prospective customers because the existing ones can be exploited thru estimated billings without correspondence supply of same.
The eligible customers got value for money, they are directly supply by the GenCo thru transmission company which will invariably helped in reducing like St energy rejected by the Discos to avoid waste and loss of revenue to the genco.
‘’I don’t know if the NERC felt slighted by that arrangements but they cannot rewrite an extant law except by act of parliament, the reason I asked if the section 27 that the minister then lashed to bring about the eligible customers.
“The NERC also sought the audience of stakeholders before it took off because I was part of the stakeholders that deliberate on it at Eko hotel and suites in 2019, so I don’t know the fuse about. That’s the only policy that showed there is a little competitive tendency in the industry if not it’s a systemic monopoly in operation as consumers have no alternative providers if one disco default in service.
I have advised that the affected industries and other customers beneficiaries can sue NERC and join power generating companies to ask for order of mandamus for NERC to put it back since it’s provision of the electric power sector reform act, 2005.
“We can’t continue like this and want growth and development in the sector .We will continue to grope between 3_5k megawatts,year in year out since no motivation for GenCo to generate more since our capacitor won’t be able to distribute it out thru the discos due to moribund or non-maintenance of substation and transformers.
He added that All Electricity Consumers Protection Forum, will write NERC to find out the motive behind their actions, demand immediate restoration of the policy or ‘’we meet in court on behalf of the affected consumers’’
Goddy Duru Oguzie, Managing Director of PowerTech Power International Limited, also made allusion to the content of the law per the action of the regulatory agency.
He told Daily Independent: ’The question to ask and find an answer for is” what did the law say about this issue?” Then, the next question is “why go against the law”. The right thing to do is follow the law and what it says otherwise any other action is a”bypass” which is illegal. So my advice is that the stakeholders desiring to implement their wish should move to amend the law. Otherwise, if NERC’s action follows what the law says, then so be it and let the aggrieved do the lawful needful’’
Barrister Kunle Kola Olubiyo, the President Nigeria Consumer Protection Network, noted the only window available for Market Competition in the Nigerian electric market for bulk users of electricity Nigeria is the Eligible Customer transactions and framework.
He said: “Not until they decommissioned their source of power supply from the host DisCoy and migrated to the NIPP / NDPHC sourced eligible customer national power grid supply loop.
“This is the case with lots of industries in Nigeria who are Bulk users of electricity and that qualifies for eligible customer transactions. The original ideals of eligible customer transactional framework in the power sector was designed to give end-users of electricity the right to choices or options in a near 100% monopolistic Nigerian electricity market.
“The beauty of the market is in the Competition but this not the case here as there seems to be a carefully and well-orchestrated Institutionalised synergy between the Regulatory Institutions and Market Participants / Markets Operators to stifle Market Competition in ways and manners that is inimical to the collective national economic interests.”
‘’The issue of Eligible Customer Framework and Sub Franchise are all in built design to pamper the downstream power utilities companies .It is obvious that the investors lack the capacity to mobilised the requisite FDIs or cash flow needed to make impact in terms of investment..