Reps organize stakeholders meeting to improve Electricity in Nigeria
Comfort Chukwukelue
The House of Representatives Committee on power has organized a power sector stakeholders interactive dialogue on confronting Nigeria’s power challenge as the nation migrates to multi-tier electricity market.
The two day workshop organized in Abuja is aimed at transforming and regulating the power sector in Nigeria.
Recall that the Nigerian Electricity Regulatory Commission had earlier in April approved an increase in electricity tariff for customers under the Band A classification, with the customers paying N225 kilowatt per hour, up from N66.
The Chairman of the Committee on Power Hon. Victor O. Nwokolo during his opening speech says the aim of the dialogue to provide a policy for the stakeholders “our objective over the next two days is multifaceted but clear. Firstly, we aim to provide a dynamic platform for stakeholders to evaluate the progress made thus far in the Nigerian Electricity Supply Industry (NESI)’s development. We will delve into the successes, challenges, and opportunities encountered along this journey, seeking to identify key areas for improvement and innovation.”
Hon Victor further said the discussion will center around the seamless transition to a Multi-Tier Electricity Market as outlined in the Electricity Act of 2023.”This transition holds immense potential to enhance competition, efficiency, and reliability within the electricity market, ultimately benefitting consumers and driving economic growth. Through collaborative brainstorming and analysis, we aim to chart a clear roadmap for this transition, ensuring that it is smooth, inclusive, and conducive to sustainable development”.
He stated that the workshop will serve as a platform for stakeholders to explore innovative solutions to the persent challenges plaguing the power sector. “From infrastructure development and financing to regulatory frameworks and consumer engagement, we will examine a wide array of issues and propose actionable strategies for improvement.
The Minister of Power, Chief Adebayo Adelabu in his speech stated that the country has witnessed incessant collapse of transmission which is caused by lack of adequate infrastructure. He disclosed hydro energy would be deployed for the coastal cities.
He further assured that the novel approach will go a long way to solve the power problems, encouraged state Governments to invest in power generation in their states.
The Speaker of the House of Representatives Rt. Hon. Abbas Tajudeen, Ph.D In his opening Remarks He started by commending the government under President Bola Tinubu for its commitment and drive on serviceing the power sector “The very first Bill signed into law by the President barely a few weeks after his inauguration was the Electricity Act (Amendment) Bill, 2024, which authorised states, companies, and individuals to generate, transmit and distribute electricity. The law repealed the Electric Power Sector Reform Act (EPSRA) signed by President Olusegun Obasanjo in 2005.”
The Speaker further disclosed plans to propose a law that would make it mandatory for the relevant Federal Government bodies to consult the National Assembly and other stakeholders before fixing Electricity tariff.
“Accordingly, I will sponsor a bill to provide administrative procedures that entrench proper consultation and legislative review of process for tariff setting in Nigeria’s electricity and other public services,” he said while declaring open a power sector stakeholders interactive dialogue/workshop organised by the House Committee on Power.
The Speaker said he would have expected that the forum and extensive consultations would have preceded the implementation of the new multi-tier electricity system.
“Having this consultation now appears to be an afterthought and goes contrary to the Electricity Act, 2024, which mandates consultation with all relevant stakeholders in determining just and fair tariffs,” he stated.
Speaker Abbas said: “I hope this forum allows all stakeholders to interrogate whether the new system meets the criteria outlined in the Act.
“The fundamental principles of just and fair pricing of electricity as laid out by a leading authority in this field are (1) simplicity, (2) understandability, (3) acceptability, (4) non-controversial, (5) stability, and (6) non-discriminatory. The question before you today is whether the new tariff model meets these principles.
“In framing the way forward, we can look towards best practices and successful models from other countries that have implemented similar market structures. Notable strategies include strong regulatory oversight to ensure fairness and transparency across all tiers.”
Speaker Abbas noted that discussions at the forum were set against the backdrop of the significant challenges and remarkable opportunities within the power sector.
He said: “The government’s objective is clear – to foster a resilient, efficient, and sustainable power sector capable of supporting our nation’s ambitious economic and developmental goals”.
“Historically, the Nigerian power sector has grappled with challenges that have stifled its growth and hampered its efficiency. These challenges include inadequate generation capacity, dilapidated infrastructure, frequent disruptions in power supply, and financial inefficiencies that have eroded the sector’s viability.
Speaker Abbas also said the shift towards a multi-tier electricity market represents a strategic pivot in our approach to power sector reform. He added that this model envisaged a structured market segmentation that allows for differential pricing and service levels tailored to diverse consumer needs and capacities.
The Speaker noted: “However, this is just one side of the coin. Despite the much-touted benefits, the transition to a multi-tier market is challenging. These include regulatory complexities, the need for substantial capital investment, the risk of market segmentation leading to disparities in service quality, and resistance from different stakeholder groups due to changes in tariff structures.
“We must acknowledge that numerous stakeholders and industry experts have expressed concerns that the proposed increase in electricity tariffs could lead to significantly higher utility bills. This increase could reduce disposable income for consumers, escalate operational costs for businesses, and increase the prices of goods and services, disproportionately affecting low-income earners in Nigeria. Some experts argue that these changes might drive more individuals into poverty, especially as inflation and foreign exchange issues continue to strain households and businesses.
“Additionally, critical problems within the electricity value chain need to be addressed. Technical and commercial losses, which have not been effectively tackled, add inefficiencies that consumers are indirectly forced to cover, contributing to the cost recovery efforts. These losses amount to billions of naira.”he said
The Speaker commended the house for the relentless commitment and leadership in spearheading the legislative framework that supports the transformative agenda of the President.
At the event were The heads of agencies under the ministry; former Minister of Power and Chairman of Geometric Power Ltd., Prof Bartholomew Nnaji; former Minister of Information and National Orientation, Prof. Jerry Gana; Group Managing Director of Sahara Group, Kola Adesina; Generating Companies (GenCos), Distribution Companies (DisCos), among others stakeholders.
