PROF. YEMI OKE, Ph.D, FCTI, FCArb.
One of the crucial issues raised in my inaugural lecture delivered on Wednesday November 23, 2022 at the University of Lagos, titled “AN ANSWER’ IN SEARCH OF ‘A QUESTION’: A PIONEER’S PROGNOSIS OF THE NIGERIAN ELECTRICITY LAW” was that, if the ENRON-Lagos power project of 1999/2000 had been allowed to scale through (and not scuttled by needless exercise of “Federal might”), Nigeria would, probably, by now have been close to national self-sufficiency in power generation, transmission and distribution.
As pioneering electricity law scholar, researcher and expert, I anticipate that a Bola Ahmed Presidency would seek to do things differently with emphasis on result-oriented power sector governance and administration.
Given his (Bola Tinubu’s) experimental intervention in the botched ENRON-LAGOS power project of the 1999s/2000s, it is expected that BAT would radically deploy his best endevours in human capacity and knowledge-based approach to sector governance.
BAT would have no alternatives than to chat a more prosperous regime for the Nigerian power sector including generation, transmission, distribution, metering and allied services. Beyond doubts, power sector is the engine of economic growth and the much-desired wealth creation for Nigeria and Nigerians.
To this extent, speculatively though, and as amplified elsewhere including/in addition to my 10-Point Proposal for Stable Electricity in Nigeria in my inaugural lecture, a President Bola Ahmed Tinubu (come May 2023), may deploy all or some the following twenty (20) urgent policy and regulatory interventions in the power sector:
(1) Re-acquisition and Refinancing in the Power Sector: BAT may likely consider another round of re-acquisition and refinancing in the power sector as a matter of inevitable realities. This may entail that the Federal Government may give up some of its current equity stakes in the DISCOs and GENCOs to serious-minded, financially and technically buoyant investors to enable new entrants have controlling shares.
(2) Restructuring of DISCOs and GENCOs: The DISCOs and GENCOs may also need to restructure by voluntarily or persuasively surrendering some of their stakes in (carefully structured share buy-outs or sale, deals) for the same purpose. This may be further to a policy directive.Certainly, reversing privatisation, though wrongly and hastily done, is not an option; it might create more problems than we intend to solve as a country.
(3) National Grid Concession: Concessional Grid structuring may be explored by a BAT presidency as against Federated grid. For instance, Abuja, Lagos, Rivers may be on separate grid structures, so also South-West, North-Central, etc on separate grid arrangements along the lines of the six (6) geo-political zones of Nigeria (being part of the writer’s theory of Decentralised Energy Options-DEOPs). The grid structure may also be remodeled or paired-grids, like “Lagos-Ogun-Oyo”, ”Kano-Kaduna-Katsina”, etc.
(4) Restructuring of NERC: A BAT presidency may view the NERC- Nigerian Electricity Regulatory Commission as being unconstitutional as presently constituted. NERC may only exist for grid-based generations, transmission, and distribution (as contained in Items 13 and 14 of Schedule to the CFRN, 1999). The functions of Nigerian Electricity Management Services Agency is duplicative, and should be subsumed under relevant directorate of a reformed NERC.
(5) State Government and Power Sector: Like his experimental ENRON-LAGOS initiative, State Governments may now get involved more actively to begin to license power entities or companies for off-grid generation, transmission, and distribution including setting up of State Regulators, E.g., Lagos State Electricity Regulatory Commission- LAGSERC; Edo State Electricity Regulatory Commission, Ogun State Electricity Regulatory, Kaduna State Electricity Regulatory Commission, etc.
(6) Progressive Licensing Regime (PLR): This or a similar policy may also be deployed by a BAT Government. As a model of incentivised (Progressive) licensing regime that allows allottees to undertake electricity activities like generation, transmission, or distribution vide bank guarantees (BGs) and get waivers for provisional licenses subject to actual generation and distribution of agreed megawatts (as the case may be) within the first two years of allocation otherwise, the bank guarantee is called in default as aggravated penalties beginning from the date the license was first issued.
(7) Abolition of Rural Electrification Agency: Federal Government under a BAT presidency may back-off from all forms of off-grid regulation and scrap RURAL ELECTRIFICATION AGENCY.
(8) Ceding Rural Electrification Funds to States: Further to the above, a Federal Government under BAT presidency may also consider ceding Rural Electrification Funds to States and Local Governments, to pursue some of the initiatives listed below, being closer to the rural populace.
(9) Local Government-based Power Generation: Nigeria has 774 Local Government Councils (aside Local Council Development Areas- LCDAs). For example, if every Local Government in Nigeria is able to generate at least one (1) Megawatt every other year (2 M/W for four years) through off-grid models like renewables, solar, wind turbines, de-bushing technologies, captive, mobile power stations and others, Nigeria will generate additional 1,548 to add to the existing capacity. Making it a yearly policy for 4 years will add another 3,096 to the existing national capacity vide Local Government-based generation alone!
(10) Rural Electrification: This initiative may be left exclusively to State Governments to pursue under a BAT presidency.
(11) Captive Power Generation: This is off-grid generation that falls squarely within the regulatory purview of State Governments. A BAT presidency, for its known disposition to decentralization, may allow States to license companies to undertake captive power generation, being generation for exclusive usage of the company or entity generating same.
(12) Mobile Power Sub-Stations: I foresee a BAT presidency massively deploying mobile power stations across the country in collaboration with States and Local Governments under a policy that reads like “National Mobile Power Initiative”.
(13) Extensive Solarisation: Similar to the above, Solar panels and solar panel farms will also be vigorously pursued by a BAT Presidency in active collaboration with States and Local Governments.
(14) M-for-M Initiative: A BAT presidency may seriously consider a policy that will lead to the concessioning of Metering to only meter manufacturers under a funding scheme backed by Federal and State Governments. Nigeria has well-established, highly reputable meter manufacturers (like MOMAS, and others) which may undertake this vital national task. In the telecommunication sectors, you source your brand of handsets and get connected to a GSM service provider. Same should be targeted for the power sector, by allowing consumers source for suitable categories and brand of meters.
(15) Cross-Licensed DISCOs and GENCOs: A BAT presidency may support and pursue a policy of decentralization in the power sector that enables Discos and/or Gencos and other entities get Cross-Licensed in their States of operation for small-scale power generation, distribution, and transmission (some States in the US have about 7 to 8 Gencos and Discos).
(16) Restructured Licensing Regime: Federal Government and NERC under a BAT may have nothing to do with licensing of one (1) M/W as currently provided under the EPSR Act of 2005. It may be scaled-up to allow NERC license those not less than 6-10 M/W. This is to allow States to undertake licensing and regulation of 0-5 M/W.
(17) Amending or Replacing of EPSR Act: A BAT presidency may speed-up and complete the amendment of the Electric Power Sector Reform Act, 2005 which currently governs the power sector. This is because it is not intended as a Law to operationalise the power sector but, as its names connotes, to midwife sector reforms. We should rework the Act as it contains over 200 errors (by documented research findings of the writer).
(18) Power Sector Deregulation: The power sector is overregulated. The world is now in favour of “self-regulation” as no Government prompted collaboration of TELCOs and Banks and FINTECH on payment and recharge platforms. The current “Regulatory Surplusage” in the power sector should be streamlined into 2 or 3 comprehensive bundles. This could be periodically reviewed and updated to add or remove obsolete provisions for new ones without legislation.
(19) NELMCO as Sector Insurer: The Nigeria Electricity Liability Management Company (NELMCO) may be re-packed by a BAT Presidency to perform functions similar to NDIC- Nigeria Deposit Insurance Corporation in the power sector to reduce high rate of insolvency of power sector firms.
(20) NBET as Power Sector Investor: The Nigerian Bulk Electricity Trading (NBET) Plc should no longer act as government agent in bulk-trading power, but as net-player in the power sector, just like the new NNPC Limited.
A BAT presidency will, all things being equal, achieve the objective of stable, affordable and sustainable electricity for homes and businesses in Nigeria by deploying all or any of the above policy options, and more. A more prudent approach is to deploy appropriate human resources to drive-home policy initiatives that will help to ameliorate the suffering of Nigerians.
By May 29, 2023 the time for politics, politicking and electioneering would have been over. It will be time to get Nigeria working again, under PRESIDENT BOLA AHMED TINUBU.
PROF. YEMI OKE, PhD, FCArb, FCTI
• National Coordinator BAT’23 Academic Group)
Member, Research & Strategy, Presidential Campaign Council of APC
December 16, 2022
