OrderPaperToday – On the 11th of January, 2020, the Speaker of the House of Representatives, Femi Gbajabiamila, gave the Federal Government certain conditions to be met before parliament will support the planned electricity tariff increment hurriedly announced by the Nigerian Electricity Regulatory Commission (NERC) days before.
NERC said the planned hike would take effect on 1st of April this year. Expectedly, the public backlash was legion and unsparing. The Speaker reacted in a tweet: “Any such increase should only be made after the proposed amendment to the law criminalising estimated billing is signed into law,” he posited.
The position of the Speaker on estimated billing could be traced to the 8th Assembly which covers the period between 2015 and 2019. Nigeria’s National Assembly, particularly the House of Representatives has a long history of legislative interventions in the power sector. Most notably and controversially too, is the $16billion power probe in the 6th Assembly which left Nigerians with more questions than answers.
Specifically, the 8th Assembly reached 3 different resolutions on electricity tariff increments and 7 different resolutions calling on Distribution Companies (DISCOs) to ensure that prepaid meters are provided for consumers. Now, the extant 9th assembly is again on the same path of nudging and cajoling like its predecessor.
Beginning of private sector participation…
In 2013, the Power Holding Company of Nigeria (PHCN), the country’s sole public electricity provider was unbundled and privatized into 11 Distribution Companies (DISCOs); and 6 Generating Companies (GENCOs) in a move promised to improve electricity generation and distribution across the country. A regulator, the Nigerian Electricity Regulatory Commission (NERC) was saddled with the mandate of ensuring fair play and optimal service delivery in a market-driven environment imbued with a lot of uncertainties and booby-traps for consumers and industry players alike.
Less than a decade after the experiment, a myriad of issues have engulfed the sector with not a few players and commentators concluding that the privatization has failed. Some even canvass that the process be reversed and restarted or other models introduced. This is in spite of the fact that billions of dollars have continued to be invested into the sector.
Legislative Interventions in the Sector (2015 – 2019)
The 8th National Assembly upon inauguration on the 9th of June, 2015, swung into action to address perennial issues bedeviling the electricity sector. Resolutions were reached arising from sundry motions and investigations both from the Senate and House of Representatives.
In the House, virtually all the interventions raised are accommodated in a set of 23 questions raised by then Speaker, Yakubu Dogara, at an interactive section on the power sector organized by the National Assembly on February 8, 2017 at the Transcorp Hilton Hotel, Abuja. The questions focused on the challenges facing the entire power value chain of distribution, transmission and generation.
But before that event, the House on the 27th of June, 2015, set up an ad-hoc committee to investigate the activities of the DISCOs pertaining to infrastructure and billing. The committee was given 3 weeks to report findings to plenary. The resolution on the ad-hoc panel was sequel to a motion moved by Mr. Philip Shuaibu, now Deputy Governor of Edo State, and entitled ‘Urgent need for the National Electricity Regulatory Commission (NERC) to better protect Nigerians from certain unwholesome practices of Electricity Distribution Companies (DISCOs) in Nigeria.’
Sundry sweeping resolutions…
This resolution was the first of 40 others made by the House from June, 2015 to May, 2019. Within this period, the House and the Senate had a combination of different bills on the sector – 4 in the Senate, viz: Electricity Theft Prohibition (Establishment Bill), Hydroelectric Power Producing Areas Development (Amendment); National Energy Bill, and Renewable Energy Bill; and 6 in the House, viz: Nigerian Electricity Supply Regulation (Amendment) bill, Renewable Energy Bill; Energy Commission of Nigeria (Amendment) Bill; Electric Power sector Reform Act (Amendment) bill; Hydroelectric Power Producing Area Development Commission (Amendment) bill; and the Rural Electrification Agency (Establishment) bill. While two of the bills were sponsored separately in both chambers, all of them were private member bills.
On the specific matter of tariff increase, the House on the 6th of October 2015 resolved to call on the National Electricity Regulatory Commission (NERC) to stop DISCOs from further action on upwards review of electricity tariff without further delay. In addition, the regulator and the companies were told to immediately begin the provision and installation of prepaid meters to every consumer nationwide. These decisions followed a motion moved by Mr. Solomon Maren, entitled ‘Need to arrest the impending unrealistic upward review of electricity tariff by distribution companies.’
On the 9th of March, 2016 another resolution on prepaid meters was made by the House. The decision followed a motion moved Abubakar Yinusa entitled, ‘Need for Nigerian Electricity Regulatory Commission (NERC) to compel Distribution Companies (DISCOs) to install prepaid metering system to all electricity consumers.’ The resolution urged NERC to compel and direct the DISCOs to install these meters immediately free of charge. And to ensure that the directive was complied with, the House Committee on Power was charged, to monitor compliance.
Away from metering and hikes, the House focused on the issue of funding for the sector. On 4th of April, 2016, the controversial N309billion bond proposed by the Executive for the sector, received the attention of both the Senate and House of Representatives. In the latter, a motion moved by Mr. Edward Pwajok called on the Federal Ministry of Power, Works and Housing and the Nigerian Bulk Electricity Trading Company (NBET) to immediately halt the process to raise the proposed bond. The essence of the bond, according to the executive, was to provide liquidity for the sector. The fund was to be managed by NBET. But the parliament urged the NERC instead to devise a monitoring mechanism to measure and enforce full monthly remittances by DISCOs, recoup all misappropriated funds that resulted in the accumulated market shortfalls and apply sanctions for any default whatsoever, including the threat to withdraw the licenses of erring DISCOs. The Committees on Power, Privatization and Commercialization, and Aids, Loans and Debt Management was mandated to investigate the matter further.
The Senate also took a similar stance on the bond when the matter was raised in November 2016. Sequel to a motion sponsored by Senator Mustapha Bukar, who in his motion, said he was worried that in spite of lack of noticeable improvement in the electricity sector, “whether in the area of investment, generation, transmission or distribution, tariffs have been increased twice since 2013 without any improvement in services.” The Senator, now late, insisted that the Federal Government’s proposed sale of bonds worth N309 billion to finance the shortfall in the Nigerian electricity market must be stopped. He said he was worried that the new borrowing was being planned to be paid as a charge on the market revenue stream. He further stressed that the first priority was to stop the bleeding in revenue and optimize efficiency by the operators. The prayers of the motion were unanimously adopted by the Senate.
Following on its resolution, the House proceeded to conduct an investigative hearing at the opening of which Dogara expressly opposed the bond plan: “The whole essence of the Federal Government embarking on the privatization of the defunct Power Holding Company of Nigeria, PHCN, and the electric power sector reform programme was to bring about efficiency to the Nigerian electricity supply industry,” he said, adding: “Unfortunately, since the unbundling of PHCN and transfer of the businesses to the privately-operated successor companies on November 1, 2013, we have not had a good report from the Electricity Market.”
By June 2016, another motion was considered by the House, this time on the general power situation in the Country. It was moved by Agbonayinman Johnson entitled, ‘Need to address the epileptic electricity supply across the nation.’ The motion prayed for the Committee on Power to invite the then Honourable Minister of Power, Babatunde Fashola, the Nigeria Bulk Electricity Trading PLC (NBET), the National Electricity and Regulatory Commission (NERC), the Generation Companies (GENCOs), the Distribution Companies (DISCOs) and stakeholders in the power sector to a public hearing to discuss the lingering epileptic power supply across the nation and proffer solutions towards improved sustainable electricity regime.
Again by February 16th, 2016, the Senate asked the Federal government to halt electricity tariff increment.
The Senate mandated the NERC to halt further implementation of the new electricity tariff till further notice, pending when public hearings would be conducted by the relevant committees.
The motion to suspend the implementation of the new tariff, which came under Matters of Urgent National Importance, was moved by Suleiman Nazif who argued that considering the biting economic hardship, it was unrealistic to increase electricity tariffs.
During the Public hearing organized by the Senate Joint Committee on the 31st of May, 2016, the then Minister for Power, Mr. Babatunde Fashola justified the increment in Tariff.
The House also on the 13th of July, 2016 asked the Federal government to halt the increment. This decision followed the adoption of a motion of urgent public importance moved by Ali Madaki.
By 2017, the issue of tariff was up for discussion again at House following a motion of urgent public importance moved by Shehu Musa, entitled: ‘Need to evaluate the Multi Year Tarrif Order (MYTO) system of electricity tariff in Nigeria.’ To this effect, the parliament resolved to Set up an ad – hoc committee to interface with NERC and other stakeholders to critically evaluate the MYTO system and re – assess all its inputs and assumptions in order to come up with a realistic and acceptable tariff regime. The committee had 6 weeks to report back to plenary but that did not happen until May, 2019.
Also in 2017, the House continued it legislative interventions but shifted this time around to GENCos and funding issues. A motion by Mr. Chris Azubogu sought a probe into the N895 billion approval by the Federal Executive Council (FEC) for the payment of gas supply to the GENCOs. Mr. Azubogu explained that while ₦701 billion was for the payment of assurance facility, ₦194 billion was for interest payment. He noted that the Federal Government and the World Bank Group were planning another US$2.519 billion as financial support for NBET as payment guaranty for the power generating and gas supply companies to ensure stable power supply that will drive the economy.
The lawmaker however said: “The National Council on Privatization (NCP) and the Bureau of Public Enterprises (BPE) are statutorily empowered to manage the Privatization and Commercialization Programme by ensuring that the Power Sector Reform progresses successfully. The NCP has been properly constituted with the Vice President of Nigeria as the Chairman and the Minister of Finance as the Vice Chairman with representatives of the Ministries of Finance, Trade and Industry, National Planning, Justice and the Central Bank of Nigeria (CBN).” Azubogu further observed that although the Ministers of Power and Petroleum Resources are not members of the NCP, they ought to have been invited to meetings involving the Energy Steering Committee established by the NCP while the Chief of Staff (COS) to the President should be invited to meetings as the representative of the Office of the President. The motion was adopted without debate and referred to the House Committee on Power to investigate the approval with a view to ensuring that the entire process was geared towards significant improvement of power supply in Nigeria.
By 2018, the conversation in parliament had moved to the issue of vandalism in the sector. On the 22nd of February, 2018, the House mandated its Committees on Power, Police Affairs, Interior, National Security and Intelligence, and Justice to critically examine the non-prosecution of vandals of electricity cables and equipment and make recommendations within 6 weeks on ways to put an end to the nefarious activities of the vandals. The House reached the resolution following the consideration of a motion moved by Mr. Francis Charles Uduyok that there is a need to investigate inability of security agencies to prevent vandalisation of electricity installations.
Estimated billing bill and other bills of the 8th assembly
Speaker Femi Gbajabiamila who was then the majority leader of the House sponsored a bill to criminalise practice of estimated billing by the electricity Distribution Companies (DISCOs).
The bill, among others, sought to prohibit estimated billing with the risk of jail term for defaulters. After scaling second reading, a public hearing was conducted on the 5th of June, 2018 and the bill was subsequently passed by the Committee of the Whole in January 2019. However, due to inability of the Senate to pass the bill, it died a natural death in the life of the 8th Assembly.
The 8th National assembly also considered some other bills, including the following: Hydroelectric Power Producing Areas Development Commission Act (Amendment) Bill, 2016; Electricity Theft Prohibition and Prevention bill; the Electricity Power Sector Reform Act (Amendment) Bill; and the Nigerian Electricity Supplies Regulation Act.
Below is a brief on the bills and their progress in the different chambers in the period under review
|Name of bill||Chamber||Sponsor||Objective||Level of progress|
|HB.1384 Electric Power Sector Reform Act (Amendment) Bill, 2018||House||Femi Gbajabiamila||Prohibition of Estimated billing.||Passed by the House and transmitted to Senate|
|HB. 510 Nigerian Electricity Supplies Regulations Act (Amendment) Bill, 2016||House||Lovette E. Idisi||Making clarity on bill liability between tenant and landlord.||Report of the Committee laid.|
|HB. 1213 Hydroelectric Power Producing Areas Development Commission (Establishment, etc) (Amendment) Bill, 2017||Senate||Sen Umar David||Amend section 8 of the Principal Act to reduce the percentage of contributions made by DISCOs and GENCOs operating in Hydro-producing states from 30% to 10%.||Passed by the two chambers.|
|Renewable Energy bill||Senate and House||Sen, Stella Oduah and Hon. Uche Nnam Obi respectively||Framework for adequate supply of renewable energy for electricity and heat||Stalled at committee level|
|HB. 611 Electric Power Sector Reform Act (Amendment) Bill, 2016||House||Muhammad Usman||It sought to mandate NERC to publish it audit account with or without the approval of the minister of power||Report laid|
|HB. 1335 Rural Electrification Agency (Establishment) Bill, 2018||House||Adebutu Oladipupo||1st Reading|
|SB. 496: Electricity Theft (Est.,Etc) Bill, 2018||Senate||Sen. Yahaya Abdullahi||To create a task force to checkmate stealing of electricity installation||Passed Third reading at the Senate|
|SB.77: National Energy Bill, 2016||Senate||Theodore Orji||First reading|
- This report was supported by the MacArthur Foundation