Privatization: NERC to inaugurate dispute resolution panel for power sector

The Nigerian Electricity Regulatory Commission (NERC) has concluded plans to constitute a Dispute Resolution Panel (DRP) soon as part of the conditions precedent for the declaration of the now postponed Transitional Electricity Market (TEM). Already, the commission has appointed Professor Mamman  Lawan of Bayero University, Kano as the Dispute Resolution Counsellor as part of the process. The TEM is to be declared after all the conditions have been put in place to ensure smooth operations by the private sector operators. Head of Public Affairs at NERC,  Usman Abba Arabi , said in Abuja on Tuesday that the  Dispute Resolution Counsellor was appointed in keeping with the  market rules for transitional and medium term stages. He said: 'The assignment of the Dispute Resolution Counsellor is to evolve a system of alternative dispute resolution for market participants in the system- and market operator-controlled Nigerian electricity market; thereby providing regulatory and commercial certainty in the fair and speedy resolution of disputes that arise among these Participants. The engagement of the counsellor cannot come at a better time, as there are a number of disputes that have arisen between operators and the market operator, and system operator. These disputes are mainly to do with load allocation and inconsistencies in invoicing. The counsellor is to work with a Dispute Resolution Panel, soon to be constituted by NERC.' He recalled that NERC had on February 12, held a meeting with Chief Executive Officers of distribution companies, generation companies, independent power producers and other stakeholders. Drawing from the meeting, he stressed that consumer issues including rebranding, metering, forum office, need to be taken seriously by DISCOs as a prerequisite for the consideration of any tariff review request. On load allocation, he stressed that the Transmission Company of Nigeria would meet with Eko DISCO to develop a framework for investment in the network. He said NERC had written to the Vice President requesting that a meeting be convened to deal with the lingering PHCN personnel issues. 'In addition, the Bureau of Public Enterprises has set up a taskforce which is currently conducting a verification of staff that have not been paid off (severed).' On the huge problem of accumulated unpaid electricity bills from the military, ministries, departments and agencies, he said NERC had written to the President Goodluck Jonathan emphasizing the need for a service-wide circular communicating the grave consequences that non-payment will have on the sector. Statistics from the defunct PHCN indicate that over N100 billion were accumulated as unpaid bills by the military, ministries, departments and agencies of government. On the review of gas supply constraints, he noted: 'Meetings have been held between NERC and thermal generators, the Presidential Task Force on Power – PTFP and gas companies to discuss issues of gas-to-power.  An initial meeting was held with the GENCOs to identify where, in the short term, stranded capacity for natural gas could be maximized. 'Also, meeting was also held with the Group Executive Director (Gas & Power) at the Nigerian National Petroleum Corporation – NNPC on these issues bearing in mind that NERC does not regulate the gas industry. Points noted include the need to draw up a schedule for repairing damaged pipelines. 'NNPC pledged to improve security of pipelines and also reiterated the need for all parties to look at the underlying considerations of the MYTO in terms of available capacity. The Importance of shoring up delivery of gas to certain companies so as to ensure grid stability as well as the need to tie eastern gas to western gas (The East-West Gas project has been set for completion in 2016 by the NNPC) were also discussed.' He said discussions were being held with the Minister of Power on the gas supply issue and the allocation of risk in the event of force majeure.