THE Nigerian Electricity Regulatory Commission (NERC) is working with the Federal Ministry of Finance to fine-tune the establishment of a Power Consumer Assistance Fund (PCAF) that would subsidise power supply to underprivileged consumers.
The underprivileged power consumers, according to NERC, are those who may not be able to pay for electricity services as a result of the new tariff.
And in preparation for the post-privatization of 17 successor-companies of the Power Holding Company of Nigeria (PHCN) and their transfer to private concerns, the Federal Government is strengthening the powers of its regulatory agencies for effective monitoring and evaluation.
NERC said Wednesday that the move was important to ensure that the new owners of the electricity utilities do not become too powerful for government to supervise effectively. This, the commission added, would ensure sufficient monitoring and evaluation in ensuring that the new owners operate within the ambits of the laws of the land, and the Multi Year Tariff Order 2 (MYTO 11) - an instrument that sets out the framework for continuous reduction in transmission and distribution loses.
Already, NERC has developed Key Performance Indicators (KPIs) with which it would measure and subject the new plant owners to established benchmarks. The KPIs cover technical, consumer and safety performances in power stations, transmission stations and distribution units.
The NERC Senior Manager, Market Analysis and Compliance in the Market, Competition and Rates Division, Kanneng Gwom, who spoke at a media retreat in Abuja yesterday, noted that since electricity is performance-driven, a peer review process to assess the performances of the various companies was essential.
Meanwhile, about N170 billion is required to procure 2.8 million meters to meet the metering gaps for registered electricity consumers in the country, about five million of whom are said to be captured formally in Nigeria. A Metering Inquiry Committee of NERC said in a report earlier in the year that about half of that population was not metered.
According to Gwom, who gave an update on metering, "the distribution companies have estimated N170 billion to purchase 2.8 million meters required to meet the metering gap in the NESI (the Nigerian Electricity Supply Industry).
"The commission has proffered ways in which to cover this gap: monthly revenue collection, capital budget from owners and external funding. Sequel to the privatisation exercise, the distribution companies will be required to enter into contract with bidders for the supply and installation of meters. Funding of this project rests squarely on the ability of the DISCOs to collect MYTO 2 Tariff."
She stressed that a Uniform System of Account (USoA) and an international financial reporting standard (IFRS) would be adopted by the new utility owners, while a code of corporate governance would be introduced immediately.
Distribution companies play a very important role in the privatisation process as they collect revenues, which settle all the other market participants," he said. "Privatisation of PHCN successor-companies will create a competitive market. The MYTO will ensure investors' adequate return and incentives for further investment in the sector."
