Nigerian Electricity Regulatory Commission: A Tale of a Sleeping Regulator


By Ayomide Oriade

14-15 Brand Review 1Provision of stable electricity is one of the major focus of the present administration of president Goodluck Jonathan. To achieve this very important feat, the administration has embarked on transformational journey in the Nigerian electricity sector which has led to rebranding of the defunct NEPA and PHCN and the emergence of electricity distribution companies. Unfortunately however, precious little has been realized since PHCN was privatized.

The Nigerian Electricity Regulatory Commission (NERC) is an independent regulatory agency which was inaugurated on 31st October 2005 as provided in the Electric Power Sector Reform Act 2005. The present management of the commission was inaugurated in December 2010 with a mandate to; monitor and regulate the electricity industry, issuance of license to market participants and ensure compliance with market rules and operating guidelines.

Going by the above stipulated powers and mandate, it could be stated that the commission is responsible for overseeing provision of constant and reliable power supply which is critical to the growth of the Nigerian economy. Perhaps to reinforce the essence of its core mandate is to engender adequate power supply, its corporate tan-line is “Electricity on demand”. The reality for the consumers is that there is plenty of demand but there is no electricity. Also, The Commission is entrusted with encouraging the participation of the private sector in the electricity market. The aim here is to ensure that regulations which encourage profitable pricing and effective competition among market players are developed and implemented; appropriate codes of conduct and rules of engagement are also enforced to ensure an efficient and investor-friendly market. The Commission should therefore monitor industry operators and prevent abuse of the market power.

As obtained from the commission’s set goals, it aims to achieve the much desired uninterrupted power supply in Nigeria with the collective support of Nigerians.  “(through you and I) will ensure that the nation gets safe, adequate, reliable and affordable services in the generation, transmission, distribution and trading of electricity,” it stated.

14-15 Brand Review 2It has however been discovered that the commission has shirked in discharging its duties and can hugely be held responsible for ineffectiveness being witnessed today in electricity sector. Firstly, the commission has successfully let the consumers down by creating room for foul play by distributors who have continued to shortchange the Nigerian electricity consumers. For instance, the distribution of prepaid metres has mostly been done on the pages of newspapers and broadcast programmes.

Time without number, the commission has informed Nigerians that the distribution of these metres is free and it would soon circulate to all houses across the nation. This has turned out to be an empty propaganda as only few houses have the metres and most of these few ones are in selected areas. Consumers have also complained that distributors request money ranging from N25,000 before they could be given the pre-paid metres and these complaints have more or less fallen on deaf ears of the regulation commission. As if to rub salt on injury, the commission keeps on approving rate hikes for units of electricity that are hardly available.

Secondly, the inequitable distribution of pre-paid metres has inevitably sustained the exploitative tendencies of distribution companies as many consumers still continue to pay for what they never used. For instance, many areas in Lagos metropolis have nothing close to constant power supply. Some localities rarely enjoy electricity for 6 hours a day and these are houses running on the old metering system which is more or less based on estimation.

The mode of this estimation is however surprising. Most consumers don’t enjoy power supply and what they see at the end of the month is a bill showing a speedy metre. Some houses get as high as N30,000 bill and you begin to wonder if the bill is meant for a manufacturing company.  Where then is the regulation for fair play!

BRANDPOWER met some consumers, all of whom had tales of electricity woes. They vented their anger and frustration over the prevailing scenario.14-15 Brand Review 3

We serve two encounters…

My name is Hamzat Olaniran

Given the recent privatization of the power sector, have you noticed improvement in electricity supply?

Obviously no! Only the government can explain the whole issue about electricity in Nigeria. Take a look at the series of promises that we have had from this present administration as regards stable electricity. With the issue of privatization, we thought there would be improvement, but we are still where we were. The interesting part is that some areas have seen improvement but those are the special areas so to say. They are estates and government residential areas. Low cost areas like where I stay here in IfakoIjaye, we hardly have light for six hours in a day. Yet we pay bills because we still use old metering system. This is annoying and that is why most tenants owe electricity bills; not because they don’t have the money but they just can’t find the rationale for paying like N10,000 a month after expending about N7,000 to fuel their generator that same month.

Honestly, I am yet to see the difference between the old NEPA and these new distribution companies. Nothing in my own view is working for now because you can’t say it is working when 90 percent of the people cannot feel the impact. You talked about regulation and regulators; is there anything like that? I don’t think there is. If there is anything like regulations for the distribution companies, then it won’t be as bad as this. But if there actually a regulator like you said then I don’t think they are doing their job.

I am Ojelade Damilare

What can you say about electricity in Nigeria as regards the distribution companies the regulator?

Privatization does not just deliver the goods like we expect it to be in Nigeria; there must be measure in form of regulation that will push the investors to make it deliver. Privatization encourages profit and as we know in the business world, people don’t mind making excess profit even at the detriment of the market. Those who invested in the Nigerian electricity sector are there to make money and the current setting would encourage them to extort and exploit Nigerians if they are not checked. Take for instance a situation whereby people don’t have light and they still pay bills. That should happen in a privatized system. The system should ensure that you pay as you go. But reverse is the case in Nigeria and even those who should act as the umpire are either sleeping or have simply refused to do their jobs because they have sold us for money.

What do you mean by sold us for money?

It’s there for all to see! A typical example is the distribution of prepaid metres. That would have ordinarily shielded Nigerians from undue extortion because you will only pay when you use light. But the scheme has been frustrated! Nigerians have cried out that they don’t have access to these metres and that in some cases they were being asked to pay for them; whereas it was meant to be free. Even those who agree to pay still don’t get it. Now tell me if the authorities have not heard about this. What are they doing about it? The distribution of meters has been on for about two years now, how many houses in Nigeria have them. If the regulators refuse to address the issue, then we can simply say they are benefiting from the pains of Nigerians. It is frustrating but the fact is that most Nigerians have come to accept this cruel reality and are obviously coping with it.

It is obvious even from the bidding process of the distribution companies that their primary motive is to make money. Therefore, it behoves on the Nigerian Electricity Regulatory Commission (NERC) to wake up from its obvious slumber and protect the consumers by ensuring that these companies provide the service for which they are being paid.

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