Fresh Crisis Looms In Power Sector Over Asaba Distribution Licence


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LAGOS – Crisis appears to be looming in the nation’s troubled power sector over the Federal Gov­ernment’s granting of an independent electricity dis­tribution network licence to Asaba Distribution Limited.

We gath­ered that the development may be connected with moves by the Nigerian Electricity Regulatory Commission (NERC) to break the regional monopoly of electricity dis­tribution companies which has continued to hamper ser­vice delivery to customers in the country.

It is being feared in some quarters that the new move would result in legal fire­works among NERC, Benin Electricity Distribution Com­pany (BEDC), and Asaba Dis­tribution Limited.

BEDC is responsible for retail distribution of electric­ity in Delta, Edo, Ekiti, and Ondo states with geographi­cal coverage of 55,770 square kilometres.

Already, BEDC, whose mo­nopoly is being threatened, has filed a petition before NERC to challenge the grant­ing of licence to the new en­trant.

NERC has fixed tomorrow for hearing of the petition against the granting of an Independent Electricity Dis­tribution Network Licence to Asaba Distribution Limited pursuant to Section 70 (2) of the Electric Power Sector Re­form Act (EPSRA).

The commission said the hearing is also pursuant to clause 11 of the NERC Ap­plication for Licences Regu­lations 2010, and section 17 of NERC (Business Rules of the Commission) Regulations (Business Rules) 2006.

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A reliable source in the power sector told Daily In­dependent that a crisis was in the offing over the licence granted to Asaba Distribution Limited.

He said: “You see, NERC is calling for a crisis in the sector if it goes ahead with this Asaba DisCo instead of considering the refranchising of the eleven DisCos.

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“This means everyone they issue a licence, there will be a petition, so expect eleven pe­titions if they go on like this.

“I have seen no sincerity in the entire case. This is a hearing to a petition by an affected party, so attention is only to the Benin DisCo in the hearing.

“The question is, did NERC conduct a public hearing be­fore issuing the licence to Asa­ba DisCo?

“So, where is the sincerity in addressing the problem of power here?

“I agree with you that it should be for all the DisCos, why only Benin DisCo?

“It looks like punishment. I don’t think the public will be entertained here or should be entertained at all since it is only Benin DisCo that pe­titioned as an affected party.

“The next action here will be a court case, I assure you.”

Adeola Samuel, a power expert, reasoned that many times the DisCos have vio­lated the performance agree­ment without consequences.

He told Daily Independent that the review of the agree­ment was due after five years with the proviso for one more year extension, which expired in 2019, but NERC still failed to act.

He added that by virtue of that agreement and clause, the acceptance of Asaba Dis­Co may be due to a review of the performance of Be­nin Electricity Distribution Company, which is below par, hence the entry of another company.

He said it was not out of place if Benin DisCo was singled out for such perfor­mance review as the inci­dents in the area are louder in low delivery than any oth­er DisCos.

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He said: “A town in Ondo State has been without light for years even before the ad­vent of Benin DisCo yet such a company did not bother to exploit the situation for expansion, instead they em­barked on humongous bill­ings of consumers with no correspondence supply.

“An Edo civil society or­ganisation has been at logger­heads with them all this while without making any progress at meeting their yearning.

“The governor had to send their management out of the state governor’s office at a point when they came to re­mind him of owing without addressing the non-perfor­mance that had characterised their service delivery.

“If Asaba Distribution Company can break their monopoly, so be it?

“From all electricity con­sumers’ protection forums, we support any move that can bring about better service delivery.

“After all, Benin DisCo was not asked to pack up; it’s the franchise area that would be divided.

“Maybe they even forgot that each company is a le­gal entity. The performance agreement was signed and accepted by each manage­ment of the DisCos not col­lectively.

“So, each DisCo bears its name when push comes to shove. When IBEDC manage­ment was sanctioned for mis­managing the loan obtained, did any other DisCo complain of not being included.

“When four DisCos obeyed the capping method and the other seven were given an intention letter to sanction them, did the other four com­plain?

“So, each company is sub­ject to the rule of engagement and performance agreement as a legal entity, not as a class entity.”

A stakeholder in the power sector, who craved anonymity, emphasised the need for com­petition in the nation’s power sector.

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“We can’t continue like this. To us, something isn’t adding up. It is most disheart­ening and embarrassing, to say the least, if something is not working optimally.

“The way forward is to do a mid-term review of the entire privatisation exercise.

“There is a need to bring all the issues to the table. The present arrangement is bad­ly skewed and badly crafted such that even if we remain on the same trajectories for 10 years, the national goals and policy objectives of Nigeria in the power sector will be that of an auto pilot.

“NERC has done well by opening its doors to this novel and noble cause.

“Let’s test extant rules which will be a learning curve for the electricity ecosystem and strengthen the regulatory landscape.”

Kunle Olubiyo, the presi­dent, Nigeria Consumer Pro­tection Network, told Daily Independent that there was need for urgent review of the power sector privatisation ex­ercise, saying that no agree­ment was expected to be cast in stone.

According to him, “Is the moratorium of exclusivity of market monopoly unwitting­ly granted to the 11 electric­ity distribution companies designed to be till thy King­dom come, perpetual, or was it designed to be an eternally irrevocable licence?”

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