Clarity and goodwill on off-grid power

Efforts at resolving the perennial power challenge facing Nigerians have seen the distribution companies, the regulator and alternative providers locked in a tango.

 

Eko Disco warned a third party against infringing on its territorial rights while Enugu Disco has gone to court to stop the Nigerian Electricity Regulatory Commission from implementing its decision to grant power generation and distribution licenses to two special purpose vehicles set up for Ariaria Market, in Aba, Abia State.

 

We believe this is a test case of the sincerity of all parties on the goal of providing power to Nigerians. We call for good faith and a negotiated settlement that ensures win-win for all parties but primarily for the consumer.

 

Two power distribution companies took up arms recently against what they deemed violation of their territorial rights. They are the Enugu Electricity Distribution Company (EEDC) and the Eko Electricity Distribution Company. Sector regulator the Nigerian Electric Power Regulatory Commission announced on June 12 the grant of a license to operate an independent power plant in Ariaria market in the overall public interest. The license went to a special purpose vehicle of the Ariaria market traders called the Ariaria Market Independent Power Plant Limited. It would generate 9.5 megawatts embedded power for the market.  NERC also granted a distribution license to Ariaria Independent Energy Distribution Network Limited to distribute the generated power in the market.

 

The NERC stated: “The licences, issued in line with Section 71(6) of the Electric Power Sector Reform (EPSR) Act 2005 were granted after careful consideration of the applications in public interest to promote access to common goods and to promote commercialisation and industrialisation for which Ariaria, a leading commercial hub in the country, is reputed”.

 

It added, “Both licences granted to Ariariawere affirmation of the Commission’s commitment and response to the long-time yearnings of the market for a stable, reliable and sustainable electricity supply to improve quality of goods and services by Nigerian enterprises and entrepreneurs.”

 

The story and conflict over power generation for Ariaria market goes back at least ten years and involves many parties. Geometrics Power initiated moves to directly provide power for Ariaria Market and Aba.  In the beginning, Geometrics Power, floated by former Power Minister Prof Bart Nnaji, held a license to “ring-fence” Aba and Ariaria from the operational control of any other provider. However, NERC granted a license for the states including Aba and Ariaria to EEDC. The matter went to court.

 

Vice President Prof Yemi Osinbajo urged the parties to settle out of court. Abia State Governor Dr Okezie Ikpeazu has also been very involved in seeking a negotiated settlement. While these efforts were on, the Federal Government included Ariaria in a national scheme to empower specific markets to boost productivity and commerce.

 

The Rural Electrification Agency proposed a power solution for Ariaria and three other markets. These are Sabon Gari Market in Kano, Kano State, Somolu Printing Community and Sura Shopping Complex, both in Lagos and Ariaria Market in Aba, Abia State. The Off-Grid Electrification Strategy proposed the deployment of Compressed Natural Gas in three markets and solar in Kano. Its survey captured 50, 900 shops and power demand of 32.27MW. Ariaria’s 11 sections accounted for 31, 100 shops. REA surveyed an estimated power demand of 6.62MW in Ariaria; it proposed a 5MW compressed natural gas plant with a 2MW back up.

 

Even so, Enugu Disco was against the REA solution. NERC has now deployed its regulatory power ostensibly to break the stalemate. How far would this go?

 

There are many legal, business, corporate social responsibility and public policy issues involved. The legal is already in court courtesy of the Enugu Disco. We note only that by its MiniGrid Regulation 2016 government through NERC provided for mini-grids. They are defined as “any electricity supply system with its own power Generation Capacity, supplying electricity to more than one customer and which can operate in isolation from or be connected to a Distribution Licensee’s network. Within this Regulation, the term Mini-Grid is used for any Isolated or Interconnected Mini-Grid generating between 0kW and 1MW of Generation Capacity”.

 

The solution of the Rural Electrification Agency in most cases goes beyond the mini-grid specification. It then lies to the policy direction of Government as articulated by key officials. The objectives are exceptional and in the public interest.

 

More than all these, the protesting Discos must also confront reality. Our lived experience is that they have failed spectacularly to offer citizens and consumers the service for which they earned licences. Their failure has created a vacuum.  As nature abhors a vacuum, both Government and citizens actively seek alternative solutions. It would therefore not suffice to argue, as EEDC has done, that the proposed Ariaria power solutions breaches its territorial rights.

 

Power is a critical and indispensable enabler in the modern world. Citizens must find power one way or the other. Provision of power is a basic obligation of government.

 

BusinessDay calls for a negotiated settlement. All parties must go to the roundtable with one view: ensuring that the markets get the power they deserve. There is within the MiniGrid Regulation of NERC elbow room for a win-win for all parties.