Liberalisation of electricity services, a laudable development – Ex-Kwara
Kehinde Akinpelu – Ilorin
A former Kwara State governorship aspirant, Engineer Pastor Sunday Adebayo Babalola, has said that President Bola Tinubu’s assent to the Electricity Act 2023, which now replaced the 2005 Electricity and Power Sector Reform Act, was a laudable and progressive development in the energy sector.
He noted that the law empowered states to regulate their electricity markets by issuing licences to private investors who can operate mini-grids and power plants within the state.
He also observed that the law precluded interstate and transnational electricity distribution, adding that by the new Act, the Nigerian Electricity Regulatory Commission (NERC) will be able to regulate the electricity sector within Nigeria. The commission can also transition regulatory responsibilities from itself to state regulators when they are established.
According to him, the assent to the Act among other things means that anyone may construct, own, or operate an undertaking for generating electricity not exceeding one megawatt in aggregate at a site, or an undertaking for distribution of electricity with a capacity not exceeding 100 kilowatts in aggregate at a site, or such other capacity as the Commission may determine from time to time, without a licence.
Babalola also noted that former President Muhammadu Buhari, before the end of his tenure assented to a constitutional amendment which made the power sector regulatory body, the Nigerian Electricity Regulatory Commission (NERC), to now have powers to grant states licenses to generate, transmit and distribute electricity. Priortothereview, the 1999 Constitution of the Federal Republic of Nigeria in Articles 13 and 14 positioned electric power in the concurrent legislative list for federal and state governments to legislate on electricity matters. It, however, restrained the powers.
Babalola said, “On the energy sector, ex-President Muhammadu Buhari approved the amended act of the National Assembly which has made the generation and distribution of energy or power no longer an exclusive list such that states and individuals with competence can now generate, distribute, sell power and make their money. This is very good. There must be allowance for private power and they should be encouraged by making it easy for the sincere ones among them to access finance for them to do the work they planned to do.”
Babalola who is a retired Deputy Director of the now-defunct Department of Petroleum Resources, urged the federal government to encourage gas utilisation.
He said, “The FG should also make sure that gas utilisation is encouraged. Nigeria is said to be a gas province but in reality, there is no direct exploitation for gas because it is not easy to store and it is a contract business. So they should encourage the gas business through the exploration from upstream, midstream to downstream.
“In the case of the oil business, the government should encourage more exploration. There are so many fields that have been discovered 30 or 40 years ago which they are giving out in marginal bid rounds in bits and pieces and they are actually messing them up.
The last bid round was a total mess up and it discouraged foreign investors. We should do our business in such a way that it should allow foreign direct investment.”
He added, “It was messed up, even some media called it an opaque bid round. It was opaque, the rules were not followed, and people such as four or five, were joined to one field. It does not make sense. The amount that people were asked to pay was exorbitant. It does not make any sense. There are many retirees who could have gotten fields and shown people how to run and leave it for future generations. But the amount they were asking for as a signature bonus was just crazy. If a retiree says he has that kind of amount, we should question how he got it. Of course, many people failed to pay. And it was given out on a discretionary basis and to people who did not actually participate at all. There is a very reason to condemn the bid round. It is sad that my former organisation was the one that conducted it.
“It is that of the 2020 bid round. The other one is gas flare and it is even sad because sincerely they had gone to the point of the award and somebody said, “No, cancel everything.” No reason was given. And they cancelled everything. Now even the people who would have gotten investors to help them to develop those gas flare points, those investors will not come back here and would not take us seriously because we just cancelled it without reason. They just cancelled it and started all over again. So quite a number of people said they will not pay again. It did not show us as a serious country. Government is always a continuum. The one they are doing now, they have not finished it. The person that will be appointed as a minister may now say we will start afresh and that will be the third time if we are starting it afresh. It does not make any sense. It discourages foreigners from participating in our activities.”