BusinessDay

Governors resist Senate, FG power grab of electricity sector

In a rare move, Nigeria’s 36 state governors under the aegis of the Nigeria Governors’ Forum (NGF) have united to resist a plan by the Senate and Ministry of Power to stop states from activating innovative solutions to solving Nigeria’s power problems through a proposed electricity bill.

Unlike the Value Added Tax (VAT) ‘war’ where there was discordance, the state governors have united in picking holes in the proposed electricity bill, saying it works against the interest of the states as it seeks to re-establish a centrally controlled electricity sector.

In a statement on Monday, the NGF raised red flag about the harmful consequences in placing the minister in direct control of the Nigeria Electricity Regulatory Commission (NERC) and the various agencies, including the Independent System Operator (ISO).

For instance, Section 5(b) of the proposed electricity bill states, “Nigeria’s Minister shall be responsible for the determination, formulation and monitoring of government policy for the Nigerian electricity supply industry and perform the following functions including other functions assigned to him under this Bill and other Acts of the National Assembly.”

The bill added that Nigeria’s minister of power shall exercise general supervision over the affairs and operations of the Commission and agencies established under this bill, “and for this purpose give general and specific policy direction including directions on overall system planning and coordination to the Commission or agencies established under this Bill, which the Commission or the agencies shall take into consideration in discharging their respective functions.”

“Clearly this Bill is simply a means to amass wider ministerial and legislative powers and make these two stakeholders the dominant players in the sector,” the NGF said in a statement signed by its executive secretary, Ashisana Okauru, on Monday.

The governors also raised concern on the oversight responsibility of the National Assembly or its Committees, which allows the Senate a “supervisory powers of any government Ministry over government-owned enterprises such as Nigerian Bulk Electricity Trading Company plc, Transmission Company of Nigeria plc (TCN) or other entities operating in the Nigerian electricity supply industry in which government has not divested its equity holdings, and irrespective of the Ministry where such entities are placed for administrative supervision by the Ministry.

“It is difficult to see how section five and section six can work in practice to improve the credibility of NERC and the performance of the sector,” the NGF warned.

In another letter, signed by Kayode Fayemi, the chairman of NGF and Ekiti State governor, the governors said the proposed bill was injurious to the states in the country with regard to generation, transmission and distribution of electricity in their domain.

“The proposed electricity bill makes Nigeria’s minister of power a defacto GMD, something similar to what we have with the NNPC and its subsidiaries,” Eyo Ekpo, former commissioner at the NERC, told BusinessDay.

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Fayemi argued that the bill, which is expected to be presented on Tuesday at the Senate, “Is based on recommendations put together by a team of consultants engaged by the Senate Committee on Power.”

The letter further said, “The Electricity Bill by the Senate Committee on Power is not a true and fair reflection of stakeholders in the Nigerian electricity sector, most particularly the state governments. It is also not a true and fair reflection of the Federal Executive arm.”

The governors noted that Clause 2(2) of the Bill is rather injurious to the constitutional rights of States with regards to electricity generation, transmission and distribution.

They, therefore, argued that limiting the powers of states to build generation plants, transmission and distribution lines only in areas not covered by the national grid shrinks the powers of the states to make laws for electricity within their jurisdictions.

“We wish to point out that ‘electricity’ is not an exclusively federal matter. It is guided by the provisions of the Concurrent Legislative List. Articles 13 and 14 clearly provide that the power to make laws for the generation and transmission of electricity are concurrent,” the letter read in part.

According to the governors, past efforts of states to establish and sustain electricity markets of their own have been stifled by the Federal Government, citing efforts of Lagos and Rivers states as examples.

The letter further pointed out that states like Lagos, Edo, Ekiti, Ondo and Kaduna have already taken the initiative to enact policy statements and laws for the electricity sectors in their states.

A similar policy is being championed by the 19 states of Northern Nigeria, they noted, pointing out that these states have come together to establish a common platform for realising the benefits of the extensive renewable energy resources that their region is blessed with.

“It would be unconstitutional and an unjustifiable act of overreach for the Senate to consider and pass a Bill that continues to treat the Federation as one single electricity jurisdiction or sector,” the governors argued.

They explained, “While a single Electric Power Sector Reform Act may have been useful as a catalyst for the sector in the early years of the Fourth Republic, the states have all come of age, literally and metaphorically, and the arrangements must change in a way that accepts and respects the maturity of the states in electricity matters; a reality that this Senate Electricity Bill does not recognise and take account of but at best only pays the most cursory lip service.”

The governors added, “The NGF does not support this Electricity Bill in the version currently before the Senate, except these amendments are reflected. This is because it is unconstitutional and maintains the policy of Federal Government overreach in the electricity sector that has not yielded development to the country.

“The governors recommend the constitution of a Working Group, spearheaded by the State Governors under the auspices of the National Economic Council (NEC), to work with the NASS leadership on the way forward for the electricity sector.

“From this should emerge a new National Electricity Policy and the foundations of a new Act of the National Assembly that, for the first time, will have the full buy-in of the States,” they concluded.

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