Speaker Calls on Stakeholders for Multi-tier Market in Power Sector

 Speaker Calls on Stakeholders for Multi-tier Market in Power Sector

…Lists Challenges in Power Sector

Speaker of House of Representative, Hon. Tajudeen Abbas, has called for stakeholders’ collaboration to reform operations and transmission of power supply across the country.

He disclosed this during a 2-day dialogue/workshop on Nigeria’s Power Sector held in Abuja with the theme: Confronting Nigeria’s Power Challenge As The Nation Migrates to Multi-Tier Electricity Market: A Legislative Intervention

The speaker said the very first Bill signed into law by the President Bola Tinubu, barely a few weeks after his inauguration was the Electricity Act (Amendment) Bill, 2024, which authorised states, companies, and individuals to generate, transmit and distribute electricity.

The law he emphasized, repealed the Electric Power Sector Reform Act, EPSRA, signed by President Olusegun Obasanjo in 2005.

Tajudeen also applauded the House Committee on Power and its Chairman, Hon. Victor Nwokolo, for the relentless commitment and leadership in spearheading the legislative framework that supports the transformative agenda of the President.

He said, “This is in line with our Legislative Agenda, which prioritises economic growth and transformation of key sectors of the economy, especially power.

“The government’s objective is clear – to foster a resilient, efficient, and sustainable power sector capable of supporting our nation’s ambitious economic and developmental goals.

Tajudeen also broached on how Nigerian power sector has grappled with challenges that have stifled its growth and hampered its efficiency over the years.

The speaker identified some of these challenges such as; inadequate generation capacity, dilapidated infrastructure, frequent disruptions in power supply, and financial inefficiencies that have eroded the sector’s viability.

He again added that the inadequate metering and the consequent revenue losses have perpetuated a cycle of debt and underinvestment that has undermined the sector’s potential.

The reps boss called for collaborative efforts to bridge both public and private sector expertise and resources.

He expanded, “The shift towards a multi-tier electricity market represents a strategic pivot in our approach to power sector reform.

“This model envisage structured market segmentation that allows for differential pricing and service levels tailored to diverse consumer needs and capacities.

” It promises enhanced efficiency through competitive practices, encourages investment by delineating clear market segments, and improves reliability and service delivery across the board.

He encouraged stakeholders to promote the benefits of the system, including enhanced competition and efficiency as multiple players are allowed to operate within different tiers.

“These include regulatory complexities, the need for substantial capital investment, the risk of market segmentation leading to disparities in service quality, and resistance from different stakeholder groups due to changes in tariff structures.

“This increases he explained, could reduce disposable income for consumers, escalate operational costs for businesses, and increase the prices of goods and services, disproportionately affecting low-income earners in Nigeria.

Though, experts argue that these changes might drive more individuals into poverty, especially as inflation and foreign exchange issues continue to strain households and businesses.

He additionally added that critical problems within the electricity value chain need to be addressed.

“Technical and commercial losses, which have not been effectively tackled, add inefficiencies that consumers are indirectly forced to cover, contributing to the cost recovery efforts. These losses amount to billions of naira.

“Having this consultation now appears to be an after thought and goes contrary to the Electricity Act, 2024, which mandates consultation with all relevant stakeholders in determining just and fair tariffs.

Commenting on Section 33 of the Electricity Act 2024 establishing the NERC as a public agency subject to the oversight responsibility of the National Assembly under Sections 80-88 of the Constitution and Section 34 of the Act, which provides the function of the NERC to ensure that the prices charged by the licensee are fair to consumers and are sufficient to allow licensees to finance their activities.

The Reps boss then stated, “I hope this forum allows all stakeholders to interrogate whether the new system meets the criteria outlined in the Act.”

Discussing ahead, he advised stakeholders to uphold fundamental principles of just and fair pricing of electricity as laid out by a leading authority in the field which he read as, (1) simplicity, (2) understandability, (3) acceptability, (4) non-controversial, (5) stability, and (6) non-discriminatory.

He enjoined the congress on continuous engagement with all stakeholders to ensure that the reforms meet the diverse needs of the population and maintain public trust.


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