Why did NERC ban DISCOs’ association for criticising Fashola?

The Nigerian Electricity Regulatory Commission (NERC), the regulator of the power sector has essentially proscribed the activities of the Association of Nigerian Electricity Distributors (ANED), a pressure group formed to press for the rights of electricity distribution companies (DisCos), saying the group has no binding legal contract in the sector.

In a communiqué issued at the end of the last monthly meeting with power sector operators, excerpts of the document reads, “Inter- relationships between Electricity Distribution Companies were encouraged but activities of Association of Nigerian Electricity Distributors (ANED) were discouraged.”

The document further said, “A strict adherence to contract agreement signed by the Commission’s Licensees (DisCos) was re-echoed as the only binding legal entity that should form the continued relationship between the Commission and Electricity Distribution Companies

“The meeting agreed henceforth the Legal Counsel of the Electricity Distribution Companies representing ANED should never in whatsoever way interfere with the policy directives or regulatory pronouncements made either by the honourable minister of power or the commission. That no unwarranted remark should be made by ANED representatives against the person of the honourable minister, NERC Chairman or against any of the NERC Commissioner going forward.”

There is clearly no love lost between Babatunde Fashola minister of Power, Works and Housing and ANED. In July, the minister issued a press statement specifically addressing the irritation ANED’s executive secretary Sunday Oduntan, was causing, and calling him an interloper.

“Oduntan should tell members of the public if ANED is a licensee. He should tell the public whether he is an investor in a DisCo and in which DisCo he has invested and what he invested,”

Then it gets personal, “He should tell members of the public that I walked him out of our monthly meeting because he has no capacity to attend and he was not invited. If ANED is not a licensee, who is ANED? An NGO? If so, they should listen to consumers because nothing is going on about poor service.”

Clearly ANED’s Odutan has become a nuisance that must be removed. However, NERC’s ban on the association coming after the minster’s public frustration with the group, questions its independence. It reinforces the notion that it is tied to the apron strings of the minister.

On July 5, Oduntan in an interview on Television Continental, a Lagos-based broadcasting outfit, said the major problem in the sector is the regulator, who is partial, unfair and incompetent.

Usman Abba Arabi, NERC’s spokesperson in response to BusinessDay’s request for comment said, “We do not respond to ANED. They are not our licensee. NERC does not recognize them. So we will not join issues with them.”

Pressed further that the claims of an association that speaks for its licensee when valid should warrant more than just a cavalier response, Arabi insisted that the group does not matter as they are not the ones they are regulating. But NERC did not proscribe the group even then.

Legal analysts, including BusinessDay’s legal representatives said that ANED by virtue of the fact that it did not obtain any license from NERC had no standing and lacks the ability to engage the Commission. This is, in spite of constitutional guarantee to free association, they said ANED would have a weak case pleading this right.

Perhaps, but it beggars belief that the DisCos on whose behalf, ANED claims to speak have not disavowed the organisation. Analysts say they play a critical role in pushing back on some of the minster’s directives that DisCos consider inimical to their interest.

An example is the eligible customer declaration the minister issued last year which some DisCos consider premature. The Minister conceded to declaring a competition charge to assuage their fears of revenue loss, some say this could not have been expedient without pressure from groups such as ANED.

As majority owned private organisation, with a regulator that they accuse of lacking independence, DisCos are more comfortable speaking through the veil of a trade group so as not to jeopardise chances of keeping their licenses, especially as they are believed to have serious shortcomings with fulfilling their obligations.

Interestingly, ANED functions like full-fledged pressure group, with offices, staff and organises press conferences sanctioned by DisCos. There is little information about how it is funded but it is really not difficult to hazard a guess. GenCos too have their own group, the Association of Power Generation Companies of which Joy Ogaji, is executive secretary. Are they banned too?

While these groups may seem like an aberration, the peculiar nature of Nigeria’s power sector makes them indispensable. If the sector were treated like a business, rather than a social service hence vulnerable to political calculations, if it had an efficient regulator, a strict adherence to market rules, and sanctity of contracts respected, creating these groups would be unnecessary.

ISAAC ANYAOGU