NERC @20: We saved government trillions of naira in subsidies, says Oseni, Vice Chairman

By Chris Ochayi

The Vice Chairman of the Nigerian Electricity Regulatory Commission, NERC, Musiliu O. Oseni has disclosed that the Commission has saved government in subsidies several trillion of naira through effective regulation since inception twenty years ago.

Oseni, who made the disclosure while speaking on Thursday at the technical session to mark the 20th anniversary of the Nigerian Electricity Regulatory Commission, NERC, held at Transcorp Hilton Hotel, Abuja, said the savings contributed to improved fiscal position of the Federal Government.

Accounting to him, “To build and nurturing an institution that sustains for 20years is not easy. The Commission has had a fair share of challenges and often opposition from stakeholders in the course of delivering on its constitutional mandates.

“Despite the challenges, the Commission has recorded significant achievements in its two decade of existence. The Commission oversaw the privatisation and unbundling of the hitherto state owned vertically integrated monopoly.

“We have developed standard regulatory instruments to strengthen the electricity market, improve reliability of supply and enhance consumer protection.

“Relative to 20years ago, not less than 30% of the electricity consumers have experienced significant improvement in their electricity services.”

The Vice Chairman noted that, “Through effective regulation, the Commission has saved the Federal Government several trillion of naira in subsidies thereby contributing to improved fiscal position of the FGN.

“As we continuously strive to provide regulatory oversights to ensure improved reliability of supply, the Commission shall focus more attention on unlocking private investments especially in the transmission segment of the value chain.

“Our transmission networks require significant investments. However, our fiscal realities have shown that the government alone cannot fund it. Necessary regulatory framework will go a long way in attracting private investments.

“We have commenced the process through the creation of the Transmission Infrastructure Fund (“TIF”). I hope this effort will receive the necessary supports from the policymakers.”

Another key priority area according to him, “Is continuous push for fiscal discipline and transparency at TCN. The Commission shall continue the regulatory process for the transition to bilateral trading, and handholding of the state regulatory commissions for capacity development.

“There must be a deliberate policy by the FGN to power our industry for economic prosperity. You can power access through Mini-Grids but you can’t power your economy to prosperity.

“Thus, there is a need for policy rethink on the utilisation of the USD2bn currently available to the Rural Electrification Agency (“REA”). A substantial portion of the fund should be dedicated to providing end-to-end solution to the power supply challenges facing our industrial hubs.

“The Electricity Act of 2023 provides for regulatory oversights at the subnational level. Today, 15 states have got their transfer Order from the Commission. Eleven of them have crossed the six months transitional period but only eight out of the eleven are currently operational.

“There is a vacuum in Edo, Ogun and Oyo states. I congratulate all the states that have operationalised their regulatory commission.

“However, I wish to advise our colleagues at the State Electricity Regulatory Commission to note that regulation is not populism, activism or politics, rather, it requires being objective, analytical, attention to details, having an independent mind and being able to see beyond the surface.

“You must constantly remember that there must be a utility before you can be called a regulator! While it is impossible to isolate yourself from the government (policymakers or legislature), always remind yourself of your roles as an unbiased umpire.

“I also urge you to avoid being in a compromising position with your licensees no matter the situation. This is necessary to avoid regulatory capture.”