Do we really need the Nigerian Electricity Management Services Authority?
Proem
There have been debates on the necessity or otherwise of the law to establish the Nigerian Electricity Management Services Authority (NEMSA) or indeed, the establishment of NEMSA itself. Having listened to various views in this regard, I thought to express my own views, through this medium. I end by asking a pertinent question I am not sure many people are asking or thinking about.
The NEMSA Bill
The NEMSA Bill is currently going through the legislative process in Nigeria’s federal legislative houses. Accordingly, the primary purposes of the prospective law include the creation of a body to carry out of the functions of enforcement of (a) technical standards and regulations; (b) technical inspection (c) testing and certification of all categories of electrical installations, electricity meters and instruments etc.
The Bill which is also sought to be passed into law, according to its proponents, is to ensure the efficient production and delivery of safe, reliable and sustainable electricity power supply and guarantee safety of lives and property in the Nigerian Electricity Supply Industry (“NESI”). The key questions, however, include (a) whether a new agency is actually required to carry out the functions specified above and (b) whether the Electric Power Sector Reform Act (“EPSRA”); the primary legislation which governs the NESI, does not already empower the Nigerian Electricity Regulatory Commission (“NERC”) to carry out most, if not all, of the functions the agency sought to be created by the NEMSA Bill seeks to carry out.
My Thoughts
Currently, the electric power sector is undergoing reforms; with legislative and regulatory improvements playing a key role in the development of a more efficient electricity market in Nigeria. However, care needs to be taken, to avoid a situation where there is the duplicity of roles and an unnecessarily large body of legislation and regulations. The understanding is that, as specified above, the proposed legislation seeks to create a body which shall be responsible for, inter alia, the enforcement of technical standards and regulations, as well as technical inspection in the Nigerian electrical supply industry.
However, a review of the Electric Power Sector Reform Act (EPSRA) 2005 and Nigerian Electricity Regulatory Commission (NERC) Regulations (both already issued and those being debated) reveals that the enactment of the Nigerian Electricity Management Services Authority (NEMSA) Act may lead to a situation where there is the duplication of roles and functions.
Specifically, a review of Section 32(1) and (2) of the EPSRA, in particular, suggests that there may be no need for an additional body to perform the functions stipulated in the NEMSA Bill. Good examples of the roles that could be duplicated if the Bill is passed are the functions of NERC found under Section 32(1) (e) of the EPSRA which include NERC’s function of ensuring the safety, security, reliability, and quality service in the production and delivery of electricity to consumers. These functions are performed primarily by NERC’s Engineering Safety and Standards Division led by an experienced engineer as its commissioner. Its other functions include developing and monitoring compliance of technical codes and standards for all operators in the industry and the technical evaluation of licence applications submitted to the Commission.
In my view, therefore, a better approach may be to further empower NERC through training, employment of more staff and provision of better quality work tools, to perform its duties and functions with a view to achieving its objectives instead of enacting a new legislation which would be superfluous.
It is pertinent that a cue is taken from the oil and gas industry, as very often, practitioners and other persons involved in the Nigerian oil and gas industry speak to the issue of the duplication of roles in that sector of the Nigerian economy and very often (until recently), laws and regulations were issued indiscriminately. Several commentators and consultants, who speak to issued connected with the Petroleum Industry Bill (aka, the PIB) have been pushing for the Norwegian/ Brazilian model of separation of functions and roles. A scenario where the number of agencies is streamlined and then each agency has its own specific roles without any duplication of same is being canvassed for the oil and gas industry.
The foregoing being the case, a proper review of the current roles of NERC should be reviewed and juxtaposed with the roles to be played by the proposed NEMSA to determine whether truly, same would lead to a duplicity of functions and the NEMSA Law must be passed (and I am not advocating its passage), its functions must not conflict with those already given NERC under the EPSRA. Where the key role is the performance of the same roles as those of NERC (I believe this is the likely outcome), then there may be no need to establish the NEMSA as being currently proposed.
A Fait Accompli?
The NEMSA Bill, currently at the Committee Stage at the House of Representatives with a public hearing recently held, proposes to establish the NEMSA, to take over the functions of the Electricity Management Services Limited (EMSL) which was created in 2007, as one of the successor companies from the unbundling of the defunct Power Holding Company of Nigeria. The EMSL was established to carry out the functions of technical inspections, test and certify electrical materials/equipment to ensure they are of right quality and standards for the electric power sector of the federal republic of Nigeria. Hence, the question whether the passage of the NEMSA Act is not just re-characterizing what already exist in form of the EMSL becomes apt?
To learn more about this topic and much more, read the text on the electric power sector by Ayodele Oni.
Ayodele Oni HYPERLINK “mailto:{ayodeleoni@outlook.com}” {ayodeleoni@outlook.com}, a solicitor, specializes in international energy (oil, gas and electricity) investment law and policy. He holds a mini-MBA in power & electricity.