NERC Transmits Letter to Nebo, Advocates Declaration of TEM

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NERC Transmits Letter to Nebo, Advocates Declaration of TEM

24 Sep 2013

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 Prof. Chinedu Nebo

. Mulls creation of shadow management
By Chineme Okafor

The Nigerian Electricity Regulatory Commission (NERC) has transmitted a letter confirming to the Minister of Power, Prof. Chinedu Nebo, that most of the enablement required to set the Nigerian Electricity Supply Industry (NESI) into the transitional stage were inherent, and as such he should consider declaring the Transition Electricity Market (TEM) open for operation without further delays.

This comes as the Transition Steering Group (TSG) has proposed the creation of a “shadow management”, which would mean the infusion of few management members of the new owners of the privatised PHCN companies in the operations before their eventual handover to them.
A presidential source told THISDAY in Abuja that a letter was sent to Nebo by NERC last week, intimating him of further accomplishments in the reform of Nigeria’s power sector as well as its thoughts on further expansions in the sector with the declaration of TEM.

According to the source, the letter written by NERC stated, among other things, that the existence of the National Electric Power Policy (NEPP), which birthed the Electric Power Sector Reform (EPSR) Act 2005 as well as extant market rules in the sector containing all the conditions precedents required to be met in the liberalisation of the sector, were enough to declare the TEM.

Transmission of the letter to the minister, the source said, was possible after the TSG, headed by NERC’s Commissioner for Market Competition and Rates, Eyo Ekpo had concluded its assessment and other tasks to determine the viability of the market upon a declaration of TEM.
The evolvement of NESI has been in three stages: pre-transitional stage, which include the physical unbundling of the Power Holding Company of Nigeria (PHCN), development of the grid code and market; the transitional stage which has to do with the introduction of a competitive market regime and the medium transitional stage which revolves around the creation of a balanced mechanism for the market.

It was also learnt that the TSG had proposed the creation of a “shadow management”, to ensure hitch-free handover of the power assets to their new owners. The proposal, the source hinted, is being tweaked further by NERC to ensure its smooth operational modalities when finally approved.

In view of government’s efforts to meet up with the CPs towards declaration of TEM, especially the settlement of all labour related issues, NERC had earlier asked the Operator of the Nigerian Electricity Market (ONEM), also known as the Market Operator (MO), to quickly conclude all outstanding CPs that concern it to allow for the declaration of TEM.

It also requested the MO to hasten up its execution of the market participation agreements within one week to allow the TEM takeoff, pointing out that the market operations system regulations, market settlement system, application for admission processes and procedures for registration of market participants as well as system operations and procedure amongst others were yet to be executed.


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