NERC – Regulating In Whose Interest?

By Idowu Oyebanjo

What exactly is happening in the Nigerian Electricity Supply Industry (NESI)? Whose interests are the leaders serving? Whose interest are the operators of the weak electrical network serving? And most importantly, in whose interest is the The Nigerian Electricity Regulatory Commission (NERC) regulating the industry?

*Sam Amadi, NERC Chairman 

(pix: leadership)

These questions have remained with us for a long time now. Each time one examines these questions, more questions come to the fore. Was Nigeria ready for privatisation? Does Nigeria realise that the management of electricity systems is highly technically intensive and would need individuals who know their onions to mediate the course? Is the regulator aware of its role to protect consumers from the regional monopoly of the operators? Why has it taken so long, after "unending" complaints from poor and already impoverished consumers, before NERC was forced by an order from the 8th Senate to carry out what is supposed to be its main function?

Why should consumers be pushed to the wall before a revolution occurs? Why should government wait until a huge crisis of discontent from millions of individuals - North, South, East or West, united in one voice, unleash mayhem on public utility and public officers because of years of neglect and mismanagement of funds meant to provide electricity for the nation? Why is Nigeria yet to have electricity which was discovered over a century ago?

It is widely accepted that regulation, where it is impossible to have competition, as is the case with the distribution of electricity through wires, is a veritable means of providing quality service at low cost to service users. This is true but so much depends on the regulator. The principal role of a regulator in a privatised electricity system is to cater for the interest of the consumers in such a way that operators can make reasonable profit without exploiting the consumers. In this regard, NERC has failed Nigeria woefully in recent times. Why do we say this?

There is ample evidence that NERC has orchestrated a villainous act against customers in the area of estimated billing and fixed charges. In effect, NERC has raised money for the distribution companies (DISCOs) from the pocket of already impoverished Nigerians. With NERC unable to account or monitor how much money has been "borrowed" from individual consumers, this act of treachery is daylight robbery.