Sector set to enter transitional electricity market

  Written by Emeka Anuforo, Abuja

  AFTER months of delay, the Nigeria electricity is set to enter the much awaited Transitional Electricity Market ( TEM).

  The much awaited   market is part of the critical phases of the electricity reform agenda, when all electricity trading arrangements would be consummated through contracts. Operators are to be bonded by contracts and respect for contracts. During this era, every power producing asset, or any electricity supply would  come under a contract, with heavy penalties metered out for failures.
  The Nigerian Electricity Regulatory Commission ( NERC), has announced that the nation had met all the conditions required for this critical phase, and that the Commission would immediately advise the Minister of Power, Prof Chinedu Nebo, to make the statutory declaration that the market had entered TEM.

  By this development, Nebo would in few days from now declare the market  open for trading on the terms of TEM.

  Nigerian Electricity Regulatory Commission (NERC) has said that Nigeria’s liberalised electricity market is now ready to go into the next stage of its transitional phases, the Transitional Electricity Market (TEM).

  NERC Chairman, Sam Amadi, said in Abuja that  the sector would now enter a very critical phase that would ensure better delivery for consumers.

  The final condition for TEM was the  establishment of a market Dispute Resolution Panel (DRP) which it has done.

  Inaugurating a  12-man DRP set up as part of the CPs by the Commission to mediate on conflicts of interests between market participants in Nigeria’s Electricity Supply Industry (NESI), the NERC stressed the other informal CPs that were not listed in the interim market rules but were necessary for the market to operate optimally are been finalized by the Commission.

  Under TEM, Distribution companies are also required to activate extant vesting contracts with the Nigerian Bulk Electricity Trading Plc (NBET), while generation companies would  activate their Power Purchase Agreements (PPAs). The Gas Supply Agreements (GSAs) with gas suppliers would also be activated.

  His words: “By today’s event, we have met the last condition precedent for the commencement of the Transitional Electricity Market (TEM) as prescribed by the market rules.

  “Now that we have completed the last of the formal conditions precedents and we are effectively handling the informal conditions precedent, NERC is poised to recommend to the minister of power to declare the commencement of TEM at a named date.”

  Amadi continued:  “In the days ahead, we will notify the minister of power to make such declaration. We are confident that the Nigerian electricity market is ready to successfully enter the transitional stage.

  “The formal CPs include the approval of grid codes and market rules, establishment of an independent regulator, establishment of market operation and system operation with functional capabilities and the establishment of a market dispute resolution mechanism.

  “Today’s celebration marks the completion of the formal CPs. NERC recognises that there are some informal CPs not listed in the market rules but necessary for the optimal working of the market. These include a fully cost reflective tariff, confirmation of reliable gas supply to power plants and validation of gas supply and power purchase agreements.”

  Amadi stressed how efforts by his Commission, Central Bank of Nigeria (CBN), ministries of power and petroleum resources to deal with the market’s legacy debt and revenue shortfall in a sustainable manner were part of moves to deal with the  non-market rule conditions precedent.

  The  dispute resolution counsellor, Dr. Mamman Lawan, heads the dispute resolution panel with the following as members:  comprise of Nnenna Ahakannah, Ejekam Nnenna, Adeyemi Oyedele, Hussani Mohammed, Boma Ozobia, Adeyemi Akinsanya, Tamuno George, Sadiku Folorunsho, Olufunmi Roberts, Okechuckwu Chiazor, Ezekiel Osarieme and Augustine Mamadu.

  They are reported to be engineers, economists and legal practitioners and have undergone screening on conflicts of interests. They are on a five years, two renewable terms tenure of appointment.

  NERC however noted that while they are mandated to mediate on matters relating to the market codes, the panel will not be allowed to entertain any matter relating to amendment of the market rules and charges of the market and system operators.

 Culled from http://www.ngrguardiannews.com