Why There Should Be No Tariff Increase In The Power Sector!

...NERC Should Make A Public Statement On Charging Methodology

By Idowu Oyebanjo

One of the main problems with the power sector reform in Nigeria is the absence of technocrats in the right positions. This will always lead to reversals and policy summersaults. When those with lack of knowledge of Power Systems speak, especially when the target audience resides predominantly in a country where there has not been electricity for so long, they tend to get away with it.

The problem is that such people constitute a laughing stock when similar comments are made before an international audience. Hear the Central Bank of Nigeria (CBN) governor: "For you to have good electricity, you need to pay a little more (to have better maybe)...".

I can guarantee that the National Electricity Regulation Commission (NERC) does not know what it means to determine a cost reflective tariff because these are some of the fundamentals of power systems that only those who have studied power systems and have demonstrable experience or practice can handle. Fake consultants employed by NERC can't do it. The DISCOs or GENCOs advocating for these price increases have not done it either. Can we as public request that NERC publish the analysis used to determine the so called "cost reflective tariffs?"

The power sector needs Nigerians who studied Power Systems, and who work in economies where uninterrupted power supply is the norm, to mediate the correct transition to privatised electricity utility. Although I maintained this position 7 years ago, the position is still valid because you cannot apply the Quota System syndrome to the generation, transmission, and distribution of electricity. It will fail! There is need to start again or at best, re-jig the status quo of the reform in a way the losses to the nation can be minimised.

*Amadi, NERC Chairman 

Another example of putting the cart before the horse is the fact that the wheeling capacity of the transmission network is known to be lower or at least equal to the peak generation achieved recently in response to the "Buhari Body language" in August 2015. This simply means there is no improvement to power supply that can take place now even when tariffs are increased because the weakest link has not changed and will not change overnight. More than that, I warned the authorities against establishing the electricity market because the power system is not yet ready for it but they have gone ahead because some believe the laws of economics apply to the physics of electricity. 

Try as you may, you will always recourse to the recommendations made by power systems engineer who know their onions. They aren't many worldwide so not all consultants can be of help.  I think because Nigeria has been in darkness for so long, it is in a mysterious way reflective of the attitude of those in charge of the power sector reform. Can we say for the umpteenth time that the only way, and I mean the only way, to have stable electricity supply is to liaise with power system engineers of Nigerian origin with demonstrable experience of power system leading the course in some way?

All of these amount to one thing - Abusing the sensitivities of the already impoverished consumers is the way to loot more money from the federation especially when the government at the federal level has tightened loop holes using the TSA.

 *Idowu Oyebanjo, MNSE, CEng MIET, a Chartered Power System Engineer in the UK is a regular contributor to SCRUPLES