Gencos Canvass for Scrapping of NERC


POWER generation companies (Gencos) are canvassing for the scrapping of the Nigerian Electricity Regulatory Commission (NERC) as a regulator in the industry stating that it is weak and unable to perform its duty.

Engr Sale Mamman, Minister of Power

A report by ThisDay quoting a biannual bulletin published by the Gencos, accused NERC of inefficiency despite its enormous powers therefore rendering the sector with pervasive indiscipline and contract breaches.

According to the report, the Executive Director of the Association of Power Generation Companies of Nigeria (APGC), the umbrella body of the over 20 generators in the country, Dr. Joy Ogaji, was quoted to have advocated for an “independent and transparent regulator” rather than the NERC. The Gencos stated that an industry without a regulator would be far better than what currently obtains with the NERC in charge.

“It is therefore unbelievable and puzzling that notwithstanding the overwhelming mandate that is ascribed to NERC, especially under section 96, the sector is bereft of the impact of a strong leadership.

“The somersaults of regulations and others from the commission, the lack of a firm monitoring and evaluation framework, absence of market discipline with predominant non-compliance to industry regulations and governing codes all attest to the assertion that the market or sector may be better off without the regulator,” it said.

The Gencos added that NERC has enormous powers, including the power of monitoring and enforcing non-compliance as enshrined in section 62 (6) and (7), which empowers it to penalise licencees in contravention of the licence terms through licence cancellation.

“Sustainability of the sector is hinged on a regulated market led by an independent and transparent regulator who can ensure that the market is technically and financially viable across value chain, keeping it clear of financial obstacles, benchmarking distributors to reduce losses and ensuring that the viability of generators is not threatened by fuel prices than may hinder security of supply.

“A regulator should be proactive and reactive at the same time, but more proactive to deal with the dynamics and changes to both local and global factors. Experts however argue that NERC has exhibited more reactive than proactive tendencies in discharge of their duties,” the Gencos said.

The power generators also said the supply growth from pre-privatisation to date shows that available generation capacity, which was 3,4275MW, has increased by 135.82 per cent to 8,083MW.

But according to them, the Gencos are only allowed to generate 3.972MW, thus losing an average of 4,111MW daily.

They explained that the foregoing shows that they are not faring well as they have been made to bear the brunt of the “lacklustre performance of the sector.”

“There is therefore need for a coordinated approach by all stakeholders in the Nigerian Electricity Supply Industry (NESI), a call for knowledgeable experts and technocrats to find viable/apolitical solution, encompassing the value chain,” they stated.


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