New Electricity Regulation in Nigeria: Seriously, Better Power Supply or What?

Posted on Monday, March 19th, 2012 at 4:49 PM

By Adeola Adeyemo

After much debate on the deregulation of electricity in Nigeria, the Nigerian Electricity Regulatory Commission (NERC) has issued regulations enabling investors, communities and local governments to generate and distribute electricity within their areas. The laws enable state governments with investments in infrastructure for power generation and distribution to now begin distributing electricity. Also, local governments with enough financial capability can now take advantage of the regulation to provide adequate power for their constituents.

Two regulations were issued by the NERC on Wednesday March 7, 2012. One of them titled “NERC Regulation on Embedded Generation 2012” permits investors, communities, states and local governments to generate and distribute electricity for their exclusive consumption using facilities of existing electricity distribution companies or independent electricity distribution network operators. The second one titled “NERC Regulation for Independent Electricity Distribution” permits communities, local and state governments to invest in electricity distribution networks in areas without access to the grid or distribution network or areas poorly serviced.

For most Nigerians, including myself, these regulations are taken with mixed feelings.

Electricity supply and distribution in Nigeria has been fraught with many challenges. The erratic power supply experienced has been a source of concern for individuals, businesses and investors and has hampered the economic growth of the nation in diverse ways. In most urban areas, power supply is a privilege that should be enjoyed when available but should not be expected to last for long. While in some rural areas and new communities, power supply is completely non-existent and cannot be hoped for even with more than a pinch of salt.

These regulations present some challenges to the state and local governments. It is not news that most local and state governments don’t have the necessary infrastructure or financial ability to generate electricity supply for their communities. Lagos state made a bold step last year with the launch of the first truly independent 10 Megawatts bi-fuel power generating plant to cater for some consumers on the Lagos Island. Though commendable, it is hardly enough to cater for the hundreds of industries and thousands of homes the state boasts of. Street lights in Lagos are still being powered by generating sets which consume an enormous quantity of fuel daily.

If it was left to foreign private investors, the question of affordability now arises. Most Nigerians are still groaning under the current electricity tariff that is being charged by the Power Holding Company of Nigeria. With the estimated billing system used by most homes and businesses especially under the post-paid method, people are still being faced with exorbitant bills for electricity that they did not consume. If electric supply is now left in the hands of private investors, how affordable would it be? Would residents have the opportunity to choose which source of electric supply they would want based on where they live or will they be forced to get their electricity from sources they are not comfortable with?

The NERC had recently warned electricity distribution companies not to charge their customers increased rates outside what is approved by it. However, with the huge investments private and government bodies would have to make to generate power for residents, it is wondered whether this part of the law would be upheld.

It might take some years before any private investor, state or local government starts generating electricity for its residents, but in preparation for that, Nigerians are skeptical on how it would be integrated.

So, what do you think about the new regulation? Would electricity supply be better with the power invested in the hands of private investors, state and local governments? Would this bring the much needed expansion in the generation of electricity in the country? Is Nigeria prepared for private electricity generation? Please share your thoughts.

Info Source: Punch News | NAN

Be Sociable, Share!

Tags: ,

  • Custom Search
  • 23 Comments on “New Electricity Regulation in Nigeria: Seriously, Better Power Supply or What?”

    Comments
    • Personal Shopper March 19, 2012 at 4:55 PM
    • chidy March 19, 2012 at 5:06 PM

      ok i hope this is gonna be effective ASAP. electricity is a necessity!!!!!! m’goodness. its bout time.

    • Tiki March 19, 2012 at 5:24 PM

      Big dreams! somehow I doubt this will be of much help…

    • mekhi phifa March 19, 2012 at 5:26 PM

      “The laws enable state governments with investments in infrastructure for power generation and distribution to now begin distributing electricity.” Abeg which state? With all their dependence to d “Centre”(Abuja) getin allocation every month.
      Let’s stop Deceiving ourselves till we go back to;
      1.) True Federalism,
      2.) Full Autonomy to d so called “states” or
      3.) 4 regions or 6 goe-political zones
      Then all man 4himself, very healthy competition will kick off within d country bcs 2d best of my knowledge nobody go wan breakup, nobody go wan his/her region or zone 2b in Darkness.
      But if we continue with ds NEPA, PHCN or NERC am confused now we going nowhere but Backward bcs CURROPTION will 4eva have its EVIL WAY with “ds CENTRE” being in control determining who gets what.

    • InCotonou March 19, 2012 at 5:30 PM

      This is good for Nigeria. private investment will actually drive down prices and provide better service if fair competition is allowed. Look at the mobile phone industry. Investors will come if Nigeria provides a solid legal environment where people know that their investment is protected from undue government interference. And if there is competition, they will vie with each other to get the most customers, by providing affordable prices and good service.

      This might just be the push that Nigeria needed to launch it to therank of emerging nations. Go Nigeria! We, the rest of Africa, are with you all the way.

    • ms pretty March 19, 2012 at 5:41 PM

      adeniran ogunsanya that i live, we have not had light for 2 weeks, nepa or phcn people come and parade everyday without doing anything, may they be permanent n darkness mscheeew, end of the month now they wl bring bills

    • UsaveOne March 19, 2012 at 5:59 PM

      I am sending this comment with my Generator ON!

      http://usaveone.blogspot.se/

    • Ndidi March 19, 2012 at 6:10 PM

      LOL @UsaveOne. That was funny! Thanks.

    • Me2me March 19, 2012 at 6:14 PM

      It will work o but it will take time. You are using your gen cos its still govt

    • Turn turn turner March 19, 2012 at 6:43 PM

      @InCotonou…well said! You took the words right out of my mind.

      The mobile phone industry is a good example. I remember my mum had one of those “090″ mobile phones. The line cost about N120,000 and her first bill was N300,000! Aside from the cost, the service itself was patchy and we used to rely on luck some days. Not long after competition came in the form of private investors, the line miraculously came down to N9,000.

      I have no doubt there will be teething problems but in the end it will be worth exploring this route. Nothing else seems to have worked.

    • haha March 19, 2012 at 8:17 PM

      i believe at first the electricity generated will be expensive like it was when GSM came to Nigeria (i rmbr buying my 1st sim card for 10k), however with competition prices will come down..

      however i agree with point made regarding rural nigeria, will state governments in gombe be able to put up a 100miilion USD power plant? the answer is no! however i believe this areas because of cheap labour and availability of land will attract industry and investors in such industries will invest in power and sell the rest to members of their operating community (which mostly are their staff)

      I conclude by highlighting that most policies are made with good intentions however the execution is where we need to work on… we need fair investors with a good track record in sustainable initiatives and responsible business practices.

    • faith March 19, 2012 at 9:13 PM

      since i was born av neva experiencde steady power suply in nigeria….n dis is bcos govt has been in charge of power genration n supply..plssss let dem let go for a change n lets see if things will b better!!!!…

    • OmoOduduwa March 19, 2012 at 9:24 PM

      Best news of the year so far…No pain no gain but would be worth it in the end..even in Europe..electricity is not cheap but its very efficient..you get what you pay for..time for naijas to dip into their pockets and stop this tax free..subsidy free laizze-faire lifestyle..you want quality you pay for it…or you think in Europe/US they wouldn’t cut your power supply if you don’t pay..they just bring a pay asyou use meter..so thats your own wahala..

    • chinny March 19, 2012 at 10:34 PM

      competition among private investors is what made america great, and am glad nigeria is taking this path.

    • OmoOduduwa March 19, 2012 at 10:57 PM

      I want to come back home a beg and so do most of my peers enough is enough..all this fickle visits to 9ja don do..don’t care about all the little luxuries..just need my power supply..my work and the service I provide needs constant electricity to function efficiently and balance the books abi isn’t that what business is all about??..I know people say use Gen now..but ay we just SME’s not some Big Corporate like MTN or GLO…

    • NNENNE March 20, 2012 at 1:22 AM

      About time! The job of the government is to set standards and regulations.No nationalization, no monopoly. Over time it will work. Telecommunications and cell phones is a typical example.

    • Damola March 20, 2012 at 5:59 AM

      It is part of a long term plan that may take decades to realize, but it is an important step none the less. These new regulations allow state and local government and private companies to start limited geographical market research to identify price points necessary to attract investment.

    • Oby March 20, 2012 at 10:07 AM

      I pray it works because we have suffered enough in this country and is high time we begin to enjoy the fruit of our motherland.

    • Theodora March 20, 2012 at 11:45 AM

      i believe in trying new things before condemning it, so as it is i think this is a welcome development and our prayers will be let it work and let it be affordable for the masses …God bless nigeria….

    • Gbemi March 20, 2012 at 12:32 PM

      In my opinion if we want electricity in Nigeria, we need to be prepared to pay. In most countries with consistent electricity supply bills are high. The regulation is commendable, apart from preventing excess cash in state goverment purses electricity generation on a distributed scale is always better both in terms of economics, supply and supervision

    • MissVee March 20, 2012 at 2:37 PM

      I like some of the comments I see here. The Telecom industry is where it is now cos of the private sector drive. If we want electricity, then we MUST pay for it and stop waiting for the Govt to spoon feed us! Electricity is expensive ( I know cos I work in the industry). Many of us here are part of the people who pay bribes to PHCN and touts ( called NEPA 2) for illegal connections. How many of us practice energy conservation? The street lights are on from morning till night for nothing! offices leave their lights on overnight bearing in mind that many don’t even have at all. Not to talk of our own houses. The regulations will work. Many States have approached the Fed Govt to generate their own electricity but cos the regulations were not there they couldn’t. The states quest to generate their electricity was what prompted the development of these regulations. Delta State is carrying out a project as we speak.Nigerians should start being positive thinkers and also learn to play their own role! Conserve Energy and pay your bills! The govt is trying its best to see that the situation is improved. Selah!

    • Truth March 22, 2012 at 12:03 AM

      It’s time for all African’s, and Nigerians in particular to rise above the current fossil fuel paradigm and get with the new 21st century program – RENEWABLE ENERGY, especially SOLAR ENERGY.
      It’s crazy that a continent so blessed with free potential energy is continuing to suffer whilst struggling to burn toxic polluting limited stocks of oil to generate a grossly unreliable energy supply.

      Maybe the reason NEPA has never really worked for Nigerians is because, God wants a better, cleaner, cheaper more environmentally sound solution to energy provision for Nigeria, and it’s simply our lack of boldness and innovation that has limited us.

      Meanwhile in cold damp sunless europe, germany is planning to expand it’s renewable energy production (including solar) to replace aging nuclear power stations. And in the UK, you can get government grants worth thousands of pounds to install solar panels on your roof.

      Why is Africa, the continent with so much potential in this area so behind? Forget the corrupt and incompetent government, I’m asking about the true engine of progress in the country, the business community?

      Without a doubt the businessman who catches onto this next step first and brings the cheap, solar power units to homes, businesses throughout the nation, that will allow every residence true permanent energy independence, even in the most rural areas out in the bush, will be the next African billionaire.

      Some more interesting info on solar power
      http://bigthink.com/ideas/31635
      http://www.sciencedaily.com/releases/2010/04/100406125545.htm

      It’s already happening on a small scale in some west african countries funded by environmental charities-
      http://www.youtube.com/watch?v=WON3XvKjisw&feature=related
      http://www.youtube.com/watch?v=o5roWBS2eo8&feature=related

      You can even build your own!!
      http://www.youtube.com/watch?v=5Zy3ELxwdtE&feature=related
      http://www.greenpowerscience.com/

    • S.Singh April 25, 2012 at 9:55 AM

      I am interested in setting up unit to produce power by solar power stations of capacity upto from 1 MW to 10 MW if any entrepreneur interested in joint venture in nigeria may contact us for joint venture