NEMSA Bill: A Threat to Nigeria Electricity Reform




Lawrence U. Ekeh

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By Lawrence U. Ekeh

A Bill for an Act to establish another Regulatory Authority in the electricity industry? I was shocked when I read this in the Nigeria PUNCH of 17th July 2014. The Regulation Authority is to be called Nigeria Electricity Management Services Authority (NEMSA). If passed into law the NEMSA Bill will create Electricity Management Services Limited (NMSL) to carry out some functions that will overlap with the duties of Nigeria Electricity Regulatory Commission which was established by Nigeria Electric Power Sector Reform Act 2005. If passed, it will mean another Regulatory body in the electricity industry. I remember visiting home in 2011 when a lot of people were talking about proliferation of federal government agencies and that most of their functions overlapped. Same government promised to restructure and close some of the agencies. That is not long ago but we seem to have forgotten it and instead of closing, our legislators are busy trying to create more agencies. Could it be a way of creating job opportunities? That is not the right way of creating jobs. All over the globe, the government create more jobs by empowering and encouraging the private sector rather than creating “quangos”. Although I am far from home, I am always reading Nigeria news and I am particularly interested in anything to do with power improvement in Nigeria. This is because power is the life-blood of any successful industrialization. Being the Author of a book titled Industrialization and National Prosperity (lessons for developing countries); I would not support any policy that will hinder our progress towards actualizing our quest to industrialize. It is indeed close to my heart. Passing a Bill to set up a quango in the electricity industry at this critical time in NERC’s history is not only wrong and a distraction but may affect Nigeria economic advancement if the legislators do not stop the Bill. The main reason for creating NERC 9 years ago only took place less than a year ago. That is privatisation of NEPA (which was nicknamed as PCHN). Regulating divestitures or newly privatised industry all over the globe has never been an easy process. The pioneering reforms in the power sectors in England, Chile and Norway in the 1980s did not find it easy either. To worsen the situation, Nigerians expect rapid turnaround in the level of power supply since after privatisation process. The new investors are usually apprehensive due to procedural delays and risks associated with projects involving large investment. They have to bring in some sophisticated equipment in order to make a difference from the previous operators. With this burden on their shoulder, it is only by having an understanding government and regulatory regime that their pressures can be ameliorated.

I understand that the purpose of the new NEMSA Bill is to empower the Electricity Management Company (NMSL) to ensure standards in the sector. These standards according to the Chairman, House Committee on Power, Mr Patrick Ikhariala, are mainly technical conformity, safety regulation and adherence to best practices. In other words these functions are Compliance Monitoring which requires some technicians making spot-checks. Is it why the Nigeria House of Parliament has to spend their precious time on? The question one has to ask is whether these functions are carried out by NERC. If they do, there is no need to duplicate the duties or even to have Electricity Inspectorate Services Department of Federal Ministry of Power in existence. But according to the PUNCH, the Permanent Secretary, Federal Ministry of Power, Mr Godknows Igali, claimed that the Electric Power Sector Reform Act 2005 EPSR, (which gave birth to NERC) made it clear that the function of inspection of materials was to be domiciled in the Ministry. He however failed to quote the section for all to see. But let us look at what EPSR ACT 2005 as stated in section 95. S95.1 states “The Commission may appoint persons employed by it to be inspectors for the purpose of this Act and shall furnish each person so appointed with a certificate stating that he has been appointed as an inspector”. [eap_ad_2] Section 95.2 states “The inspector shall, in addition to any other function that may be assigned to them by the Commission, be responsible for inspecting undertakings to ensure the safety of operation and to investigate accidents” while section 95.5 states “subject to subsection (6) of this section, an inspector may inspect, at all reasonable times, a station or other equipment of apparatus or premises worked or used by or in the possession or under the control of a licensee”. Note that Subsection 6 is merely concerned with power of entry to premises. In addition to the section 95 EPSR Act 2005 we saw above, another major mandate given to NERC by this Act is the granting of licences to interested and successful applicants wishing to enter into the electricity industry. Obviously investors who are given licences must meet and comply with the electricity industry codes and standards that have been regulated by NERC. Naturally the body that issues licences also monitors the compliance of the rules that come with it. [eap_ad_2]Section 81 also states that the Commission shall develop and approve Standards, Codes and Manuals for the Nigeria Electricity Industry which will be binding on applicable licensees. Some of the codes and standards developed by the Engineering, Safety and Standards Division of NERC, which has the task of developing and monitoring compliance of technical codes and standards for all operators are as follows: 1. Grid code 2. Health and Safety Manual 3. Health and Safety Code v2 4. Nigerian Electricity Health and Safety Standards, Part 1 and 2, etc.

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