Jul 12 2012
NERC, Stakeholders Advisory Panel Begin Review of Market Rules
By Ndubisi Francis and Chineme Okafor
NERC Chairman, Dr. Sam Amadi
This comes as the commission and the commission and the Stakeholders Advisory Panel, —a high-level advisory working group in the Nigeria Electricity Supply Industry (NESI) will Thursday begin a holistic review and amendment of operational market rules and guidelines in the Nigerian electricity industry.
Speaking Wednesday in Abuja, NERC Chairman, Dr. Sam Amadi said the standardised and unified estimated electricity billing method to be introduced by the commission would serve in the collection of electricity revenue in the Nigerian Electricity Supply Industry (NESI) pending the total and comprehensive metering of electricity consumers across Nigeria.
The commission had held its final lap of consultation with stakeholders and electricity consumers preparatory to the adoption of a unified estimated billing system that will be binding on all Power Holding Company of Nigeria (PHCN) successor Distribution Companies in line with the new Multi Year Tariff Order (MYTO-2) which came into effect on June 1, 2012.
A time-line of 18 months had been set by the Commission within which it plans to distribute and install metering facilities to consumers in the entire Nigerian electricity industry.
But the comprehensive review and amendment of the market rules, which begins today in Abuja, is expected to harmonise sections and contents with the provisions in President Goodluck Jonathan’s power sector reform roadmap, which also runs in tandem with the Electricity Power Sector Reform (EPSR) Act, 2005.
Specifically, the ‘market rules’ are set of rules that spell out the entry mode for operators wishing to participate in Nigeria’s electricity market, govern the behaviour of participants in adherence with the provisions and spells out penalties for errant participants.
The rule is administered by the Market Operator, who sends monthly statements of activities of operators in the sector to participants and regulators. The other set of rules in Nigeria’s power sector is the ‘grid code’, which is administered by the System Operator.
Expectedly, the review meeting of the committee which comprises representatives from NERC and members of the Stakeholders Advisory Panel, including the Nigerian Bulk Electricity Trading Plc (NBET), Market Operator, System Operator, Power Holding Company of Nigeria (PHCN) distribution and generation companies, Transmission Company of Nigeria (TCN) and representatives of Independent Power Producers (IPPs), will last for about four days.
Speaking in an interview with THISDAY in Abuja, the Chief Executive Officer (CEO) of NBET, otherwise known as the ‘Bulk Trader’, Mr. Rumundaka Wonodi stated that expected review was overdue considering the current trend of reforms in the power sector.
He explained that the existing rules governing the operations of the market were put together before the commencement of the current reform exercise and would therefore require some level of tweaking in a bid to align them with extant provisions in the reform process.
“The market rule is actually a set of rules that allows people to participate in the market and how they have to behave; like I said, the market operator is actually the administrator of the rule which also tells you the different panels within the market like the stakeholder advisory panel which I currently chair with nine members from the discos (distribution companies), gencos (generation companies), transmission company, system operator, market operator, and then some independents within that.
“That panel is entrusted with the responsibility of advising the commission (NERC) on issues regarding the market and also the amendment of market rules; so the market rules actually belongs to the people of the market that is why the stakeholder advisory panel has to be there to amend it, we have other panels like the grid code panel and others; so all those things are within the market rule but the thing with the market rule is that it was put in place at the time when all these reforms have not been started and had a different model, but we saw a transitional electricity market that need to change based on the present configuration of the reform; so we find out that some part of the market rules will require amendments that will allow the current wave of reform to move forward.
“And, in recognising and appreciating the need for that, the Stakeholder Advisory Panel made a case with the Commission (NERC) for a review of the market rules. You know, usually, you can review it little by little, section by section, clause by clause, but this one, we are saying let us have a total review and overview. For that, the Commission and the Stakeholder Advisory Panel have agreed to have this weekend and we have put out four days; Thursday through Sunday to sit down with some advisors and consultants to take into account what we have heard from investors, consumers and then other parties and sit down and rework the market rules and what we will have will be one that will allow the transitional market to go forward,” Wonodi said.
According to him, the review of the market rules in a section by section, clause by clause process is aimed at evolving a comprehensive and updated market rules that are in sync with the ongoing wave of reforms in the power sector.
He noted that the current reforms in the power sector are planned on an end-to-end basis, thus, every aspect of operations in the sector must work in sync with each other to attain meaningful results in the power sector reform objectives.
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