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Non-constitution of TCN board, weak policy implementation mar tenure of sacked power minister

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THE immediate past Minister of Power Maman Saleh may have come and gone, but his two-year tenure was marred by policy inconsistency and non-constitution of the board of the Transmission Company of Nigeria (TCN), findings have shown.

Nigeria’s power sector is strategic for the economic advancement of Africa’s largest economy but has been leapfrogging despite privatisation in 2013.

Maman Saleh took over from Babatunde Fashola, who worked as the supervising minister of the ministry in the first tenure of President Muhammadu Buhari’s administration.


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He was sworn in on 21st August 2019 as the minister of power.

The ministry, according to its mandate, is the policy-making arm of the Federal Government in charge of providing direction for enforcement of the right framework and efficient running of the policies of the government in the sector.

On the policy part, a  key concern that weakened the policy direction in the power sector was the regulator -the Nigerian Electricity Regulatory Commission (NERC) – shifting grounds on eligibility customer status.

The eligible customer status came into effect in  2017.

The eligible customer policy allows the generation companies (GENCOS) to sell power directly to consumers without passing through the electricity distribution companies (DisCos).

The comes with great assurance of constant power supply, a departure from the epileptic power supply that is the main characteristic of on-grid power supply.

Fashola came up with customer policy to enable bulk electricity buyers and industrial layouts to take up power from generating companies and pay to them directly.

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This initiative was to lessen pressure on the collapse-prone grid and ensure power access directly to industrial clusters and other eligible customers through the generation companies.

Just recently, the Mamman Sale as a supervisory minister, watched as the NERC halted acceptance of eligible customers, despite Nigeria’s grid failure, epileptic power supply and the national grid only able to take less than 5000 megawatts of power.

“We have willing buyers but an unwilling market, despite the privatisation exercise. From privatisation till date, Nigerian power sector still operates as if it is in that monopoly, but eligible customers, as provided in the Electricity Power Sector Reform Act of 2005, says that the generation companies will sell electricity to three classes of customers,” Managing Director of Association of Power Generation  Companies of Nigeria Joy Ogaji told The ICIR.

Also, under the minister’s tenure, there were back and forth movements on tariff reviews and a N30 billion monthly subsidy in the electricity sector amid liquidity challenges.

This amount has robbed the country of funds needed for infrastructural development.

Another key issue during the minister’s reign in the power sector was non-constituting of  the board of the Transmission Company of Nigeria (TCN), which weakened investors’ appetite for long in the sector.

Under the minister, the TCN was not unbundled. This led to market inefficiency, resulting in grid collapse and blame-trading between the DisCos and the TCN.

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“Regulatory uncertainty affects the growth of the sector as it does not give credibility and confidence to investors. Globally, investors would like to have assurance on their investments. Changing and vacillating in the rules is a negative signal to markets unreliability,” former Chairman of the Nigerian Electricity Regulatory Commission (NERC) Sam Amadi told the ICIR.

Presently, the TCN performs the dual role of a market and a systems operator, which does not allow for proper checks and balances. It also does not give room for appropriating sanctions on distribution companies rejecting load transmission.

Findings have shown that load rejection puts intense pressure on grid capacity, causing persistent grid collapses. More so, the collapses have seen the country thrown into avoidable darkness while jeopardising several economic activities.

Under the minister, grid collapse was a common phenomenon across the country.

“The issue of unbundling of the TCN is the NERC’s responsibility as prescribed by the Act. We are currently losing a lot without unbundling the TCN. The day you open up TCN for proper unbundling, you would solve the problem of dilapidated infrastructure as people would build their own independent transmissions. Investors would come in and build their own transmission,” said a Power Sector Governance Expert Chuks Nwani.

The sacked minister’s tenure also saw the Central Bank of Nigeria (CBN) intervening more like a regulator in the sector.

Just as seen in the agricultural sector where the apex bank supervises the Anchor Borrowers Programme, instead of the Bank of Agriculture, the CBN escrowed the accounts of the DisCos to enable it to track their remittances amidst the liquidity concerns in the power sector.

 

 

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