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FG- Imo: :Regulatory Oversight of The State Electricity Market Is Now Underr ISERC

By Favour Ifeoluwa & Akinola Ajibade  The Federal Government yesterday( Monday) announced the transfer of Regulatory Oversight of the Electricity Market in Imo State to the state electricity regulatory commission, otherwise known as (ISERC). In a statement issued by the Nigerian Electricity Regulatory Common( NERC), the development is in compliance with the amended Constitution of the Federal Republic of Nigeria (CFRN) and the Electricity Act 2023 (Amended), reiterating that all transfers envisaged by this order shall be completed by 31 December 2024. According to the Commission,the transfer Order’s provisions include: “Direct Enugu Electricity Distribution Company (EEDC) to incorporate a subsidiary (EEDC SubCo) to assume responsibilities for intrastate supply and distribution of electricity in Imo State from EEDC, and that EEDC shall complete the incorporation of EEDC SubCo within 60 days from 27th June 2024. The subcompany shall apply for and obtain licence for the in
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Why Nigeria unable to fix her electricity problems

Why Nigeria unable to resolve her electricity problems

By Akinola Ajibade

The nation's power sector is under-performing due to low systems deficiencies or High Aggregate Technical and Commercial ( AT&C)losses and ageing infrastructure, a research conducted by a team of experts in the industry has said.

Others are poor customer relationship and a history of less than cost-reflective tarrifs.

In the research detailing the challenges facing the sector and conducted by Nextier, the team also  said that challenges to financing as one of the major issue,  noting that the capital structure of acquisition debt and expansion financing poses more challenge for infrastructure assets operated in a regulated utility.

Another issue identified by the report  is the challenge of raising the required long-term patient capital aligned to the long-lived infrastructure assets.

It added:”As a result, it has been a challenge for the companies to service debts, meet the necessary rehabilitation and expansion commitments, improve efficiencies, and simultaneously pay their upstream invoices to other market participants and administrative entities.

“In the context of the Nigerian market, the Multi-Year Tariff Order (MYTO), a methodology for regulating prices and rewarding the performance of industry operators, forms the basis of electricity tariffs. The MYTO allows for bi-annual minor reviews to account for changes in the parameters that influence tariffs, such as available power generation, inflation, exchange rates and gas prices.

“These minor reviews provide a 6-month generation forecast. However, factors such as gas availability, water management and transmission infrastructure capabilities also constrain actual generation,”the Nextier paper report asserted.

According to the report, due to these interdependencies within the sector, the DisCos lack complete control of all the factors that impact their operational excellence. Insisting that from a DisCo perspective,

Some of the upstream expenses are not incurred due to the unavailability of energy supply, system constraints still result in lost revenue and profits from the distribution companies perspective the report said.

It added:”A holistic approach to solving the issues in the sector is required if the NESI is to achieve its potential. Furthermore, solving the problems faced by the DisCos would help facilitate a more competitive electricity market”

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