Due Process Must Be Followed For Erring DISCOs

The Minister of Power, Works and Housing, Babatunde Raji Fashola SAN, has told the joint Committees’ of Labour and Power, Steel Development that as a responsible Government that inherited a legally backed transaction that gave majority sharing holding to the private sector. It cannot act arbitrarily, hence must follow due process or else Government will be slammed with avalanche of court cases.

At the two-day public hearing on electricity tariff hike, Fashola wondered how DISCOs could be sanctioned when they were not given tools to work with, hence Government lacks the moral right to sanction as many Government agencies are still owing large sums of money to these entities through many years of un-paid bills.

He said the issue of tariff, contrary to insinuations was not arrived at arbitrarily as the 200 Electricity Power Sector Reform Act 2005 provided for consultations with all stakeholders, he therefore “assured all concerns to explore within the Act the machineries for adjustment, as the tariff is not fixed irrevocably”.

The processes of determining tariffs are clearly outside the control of Government, he said, because with the liquidation of Power Holding Company of Nigeria (PHCN), Federal Government has become a minority shareholder which meant that things must be done on commercial basis by the regulator – Nigerian Electricity Regulatory Commission (NERC), working with the DISCOs, GENCOs, Bulk Trader, TCN and other agencies.

While requesting for time for the sector to withstand shocks presently being experienced, the Minister asked rhetorically “that the transition period of 2013 to 2016 is it a long time to wait in a sector that has been badly managed for upward of 60 years”?, he assured nothing is permanent in tariff regime, so those clamoring for tariff should not lose hope, but we need to meet the conditions as stipulated in the law.

The Minister insisted that with the enthronement of cost reflective tariff, although appreciable improvement is yet to be noticed in the sector for now, a lot more gains have been recorded in the critical area of market confidence, hence it would improve liquidity to the market in due course as more investors would take advantage of that development.

On the second day of the public hearing, the Permanent Secretary, Power, Louis Edozien, who represented the Minister, said that a more realistic overview of the power situation in the country is to see it as a national problem that requires all stakeholders to know and play their roles accordingly, rather than engage in a blame game among the actors.

He therefore urged the parliament to support the sector through legislation and over-sight responsibilities, assuring them of Government’s plan to provide meters to all customers designated asResidence 2 and 3 by the end of next year.

“Tariff is a condition necessary for robust electricity marketalthough sadly it may not be sufficient for effectiveservice-delivery, as it could be expedient to have attractive tariff for investors’ market confidence which would attract capital to the industry”.

The NERC Boss, Anthony Akah, noted that if the new tariff was not introduced, the sector would have collapsed by now, adding that as a follow-up to the new tariff, it has become necessary in order to activate performance agreement between the DISCOs and the Government, especially now that the market is governed by contract agreements.

Timothy Oyedeji
Director (Press)