FOR the current power sector reforms to achieve the desired results, the Nigeria National Petroleum Corporation (NNPC) may have to cede regulation of the gas sector to agencies directly in charge of power, according to the Managing Director/Chief Executive of the National Electricity Regulatory Commission (NERC), Dr. Sam Amadi.
Amadi, who canvassed this position, as speaker, at the April edition of the question-and-answer session anchored by the Lagos Oil Club, said this “strategy,” if adopted, would give room for effective implementation of the power sector reforms.
He expressed the regret that those who design energy policies exercise little, or no, control over gas — a critical element of the power reform.
Explaining that the situation posed great challenge to the coordination of efforts being taken to address power supply, Amadi said that the suggested move would be one of the drastic decisions the country must deal with as part of the sector’s reform process.
The NERC chief executive argued that electricity authorities formulate and supervise the implementation of gas policies all over the world. This, the NERC boss said, is ideal for proper incorporation of energy policies into the broader energy programme of the country.
Notwithstanding the unresolved labour issues around the planned privatisation of the Power Holding Company of Nigeria (PHCN), he said new owners would take over the company in October, adding that the bid documentation were being fine-tuned.
Amadi said the government was paying more attention to securing buyers that have technical capacity to reduce the huge waste in the industry, even as he put the country’s energy need at 30,000 megawatts.
The NERC boss also explained that quality of service would be improved before new tariffs are announced, giving the assurance that consistent improvement in service delivery would eventually reduce cost of energy. “When more people are connected and they imbibe appropriate conservation culture, over-all cost, which determines billing, will be reduced.”
He disclosed that the government has adopted different valuation approaches, including depreciation and optimisation, in order to arrive at a fair value that would not be faulted by critics in the future.
According to him, new licensees are not expected to add megawatts to national grid this year though the government hopes to recorver lost capacity and improve service delivery.
“Metering is a major challenge in the industry. With Abuja and Lagos, the country is currently doing about 40 per cent; other states are around 20 per cent. This is a challenge because people imbibe conservation culture when they are on meters.
“But another issue is that people boycott meters. We are looking at addressing this problem with smart meters; migration process has commenced,” Amadi said..
Another speaker and co-founder of Seawolf, a Nigerian oil rig drilling company, Remi Okunlola, said he believes government would eventually revoke some licences for marginal fields that were allocated to indigenous firms as a result of non-performance.
According to him, said funding remained the most critical challenge facing local companies that play in the oil and gas sector.