Despite the current drop in power generation and supply, the directive by the Senate to suspend the new 45 per cent tariff hike remains invalid, as the Nigerian Electricity Regulatory Commission (NERC) said it lacked the constitutional authority to reverse the order.
At the same time, the leadership of organised labour called for the probe of the NERC, and former chairman of the commission, Dr Sam Amadi, CEO, NERC, over the controversy surrounding the recent hike in electricity tariff.
The declaration by NERC came as power generation in the country has plummeted to 3,664 megawatts (MW), according to information from the Federal Ministry of Power.
The plunge happened at a time the distribution companies, DISCOs, are insisting on increasing tariff on all categories of consumers without commensurate increase in electricity supply.
Senate order
However, justifying NERC’s stance, immediate-past Chairman of NERC, Dr. Sam Amadi, described the Senate’s directive as illegal, unconstitutional and a direct encroachment on executive independence.
He said: “The order by the Senate for NERC to rescind the tariff is a direct infringement on the independence of the executive to initiate policies, in this case through NERC. It is a subtle derogation of the powers of the executive. It offends the concept of separation of power. The legislature should not interfere and direct executive action. That is clearly against the law. It is unconstitutional.”
Amadi explained that apart from the Senate lacking the constitutional right to give such a directive, NERC, as currently constituted, was not competent to suspend or rescind the tariff order issued by its former Board. He argued that until a new board is reconstituted to consider reviewing or totally suspending the order, “nobody anywhere can validly review or suspend the current tariff.”
He said: “It is not wise for the Senate to instruct NERC to stop the tariff. It will create serious regulatory risks across the market value chain. People will begin to look at it and say there is no independence of the industry regulator.”
Attacks cause generation drop
Contrary to some newspaper reports, the Power Ministry on its official website said Nigeria achieved energy generation of 3,664MW last Thursday, while energy sent out was 3,578MW. This shows 1,410MW slide from the 5,074MW, highest peak generated on February 2. It is also far below the peak demand forecast of 12,800MW.
The ministry attributed the decrease in power supply to the attack on Escravos gas pipeline, which it said led to a loss of 160 million metric standard cubic feet/day, MMSFCD, of gas.
Counter directive, counter results
But corporate consumers believe that the counter-orders were only making matters worse, as the Director-General, Lagos Chamber of Commerce and Industry (LCCI), Mr. Muda Yusuf, argued that the Senate directive to stay action on the new tariff regime might not achieve the desired result.
He said: “It’s doubtful whether it is within the competence of the legislature to give such a directive. A better approach would be for the legislature to invite the power firms to justify the increase.”
Rather than indulge in a show of power, he urged that provision of meters to consumers should be accelerated to put an end to estimated billing.
On his part, Dr. Bassey Edem, National President, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), said: “We are not interested in the politics between the Executive and the Legislators. All we want is regular and sufficient power supply with which to run our businesses. This price fixing war may adversely affect the volume of power supply which will not be good for our businesses.”
Similarly, the Manufacturers Association of Nigeria (MAN) said: “We are not in support of agencies going against the Senate. We believe that the best way to go about this whole issue is simply by dialogue.”
It argued that “the tariff is welcome as long as they are charged for what is used via the installation of pre-paid meter across homes and offices in the country. Like every Nigerian, we are happy that there is a hold to the tariff. Nigerians should be charged according to what is consumed. If the pre-paid meters were installed before embarking on the increase in tariff, it wouldn’t have raised eyebrows.”
Tougher times
Rather than getting some reprieves, Nigerians have been urged to brace up for tougher times due to the deterioration of power equipment.
Mr. Kola Adesina, Managing Director, Egbin Power Plc, said at the weekend that the primary cause of generation drop was the failure of machines and the inability to secure foreign exchange, forex, to replace them.
According to him, “The overall crisis that the country is faced with is the exchange rate and that has equally trickled to the power sector. But that is not the primary cause; the primary cause is the failure of machine. But to replace those machines, you need forex and it is not available.”
Organised labour wants NERC, Amadi probed
Meanwhile, organised labour has called for the probe of NERC and its former chairman, Dr. Sam Amadi, over the controversy surrounding the recent hike in electricity tariff by 45 per cent.
The call for the probe of the former helmsman of NERC, Amadi, was based on an alleged statement credited to him (Amadi), asking the Senate to rescind its decision on the hike.
Factional National President of Nigeria Labour Congress (NLC), Comrade Ayuba Wabba, in a statement in Abuja, described the statement by the former boss of NERC as “treacherous, shameful and saddening.”
Wabba stated that Amadi was “being economical with the truth and his legal knowledge. The duties of the Legislature, as defined by the Constitution, include legislation, oversight and investigation.
“Amadi not only described the Senate directive as a ‘dangerous precedence’, but has instigated NERC not to obey the directive as ‘it would have put itself in a double bind between the executive and legislature and a violation of the provisions of the Act’.”
“On our part, we demand that the directive of the NASS be respected and effected right away. We also demand that if any DISCO or GENCO does not have the requisite capacity, it should honourably surrender its possessory and proprietary rights to government as was the case with the Yola Electricity Company. The Yola company was honourable enough and reasons adduced by it, genuine.
“We will not fold our arms while a few individuals or companies or institutions further plunder and plunge this country into abyss.”
-Vanguard