The Nigerian Electricity Regulatory Commission (NERC’s) plan to allow the electricity distribution and trading licensees to introduce competition transition charge by has elicited public criticisms.
The Competition Transition Charge (CTC) is a new rule to make prospective Eligible Customers (EC) and other consumer class, compensate the 11 electricity Distribution Companies (DisCos) for leaving their networks to buy power directly from Generation Companies (GenCos).
NERC had in pursuant to the provisions of Section 28 of the Electric Power Sector Reform Act (EPSRA) in May 2019, published on its website www.nerc.gov.ng a Consultation Paper on a framework for the collection of Competition Transition Charge (CTC) from Eligible Customers (ECs).
“The CTC shall enable Distribution Licensees (DisCos) to recover permitted revenue and return on invested assets arising from the exit of ECs from their network,” NERC had stated.
But Transparency Awareness Group (TANGO), Wednesday, insisted that the decision was taken hastily without due consultation with relevant stakeholders in the society, stressing that the process lacked proper legislative backing with the sole aim of aiding and abetting illegality in the system.
Indeed, National Coordinator of TANGO, Ibrahim Isah, argued that the plan is not transparent and could increase the plight of electricity consumers in Nigeria.
He said: “Following the release of Regulation No NERC-R-111 issued by the Nigerian Electricity Regulatory Commission, NERC, on the 1st November, 2017, for the Nigerian Electricity Service Industry, NESI, the Eligibility Customer Status came into existence to facilitate the off-take of the stranded 2,000 megawatts of electricity that the Distribution Companies, Discos, were not able to distribute and give Life to the Generating companies, GENCos as a source of other income without depending on the DISCOs.
“A few of our members went through harrowing obstacles such as providing, amongst other things, the needed infrastructure like the 132/33kVa Transmission Dedicated Lines to their plants, the intake and the outlet substations to access power under the scheme without any contribution(s) from DISCOs.
“This gave a new lease of life to their production and has simultaneously evacuated part of the 2,000 stranded power with bulk-income accruing to the Gencos and the TCN,” TANGO stated.
With huge losses from stranded electricity and government bailout in the sector as well as epileptic power challenge being faced by industrial sector, Isah stressed that CTC would only favour DisCos, especially the chief proponent and supporter of the dispatch of stranded electricity.
According to him, the removal of the former Managing Director of TCN, Usman Gur Mohammed also created an opportunity for the cartel of Discos to hike the rate of electricity to a level that being an Eligible Customer would become unattractive and meaningless.
“They managed to convince the Federal Ministry of Finance, CBN and NERC to allow the introduction of what they call Competition Transmission Charge CTC. The CTC is to be paid to DisCos without Justification for the Service rendered.
“The CTC is to be paid in addition to the Transmission charges being paid to TCN who is a Custodian of the 132/33kVa dedicated Transmission Lines. As usual, they excluded the major stakeholders; neither do they seek their input or opinion on the matter without representing their interests,” he said.
The group therefore asked President Muhammadu Buhari, and the Senate President, Dr. Ahmad Lawan, to urgently recall the guidelines and adopt a transparent legislative process that will afford all relevant stakeholders the right to make input and contributions to the process in the collective interest of the nation.
This, it said, is to salvage the lives of hundreds of thousands of Nigerian investors.
In paragraphs 4.1(i), 4.2(g) 4.3(f) 4.4(f) and 4.5(d) of the NERC’s guidelines, the agency failed to demonstrate transparency and genuine nationalistic approach in its operations by creating avenues aimed at affording DISCOs the right to charge seamlessly at Eligible Customers, the group noted.
