The House of Representatives Committee on Power has recommended the non-renewal of the management contract for the Transmission Company of Nigeria, which the Federal Government awarded to Manitoba Hydro International of Canada.
The committee said the contract had failed to achieve its objectives and should be discontinued upon its expiration later this month.
The committee, which is headed by Mr. Dan Asuquo, made the recommendation in its report on plans by the Nigerian Electricity Regulatory Commission to pay retiring commissioners a severance package of N2.7bn.The government had contracted the Canadian firm to manage the TCN in the wake of the privatisation of the power sector, which saw the government retaining the transmission aspect of the power industry.
A copy of the report was obtained by The PUNCH in Abuja on Tuesday.
On the TCN, the report stated, “The management contract with MHI is not yielding that desired result; the contract of MHI must be terminated when it expires in June 2016.
“Meanwhile, adequate succession planning must be put in place with the effective establishment of the System Operator and the Transmission Service Provider as provided by Section 25 of the Electricity Power Sector Reform Act.
“The Act does not provide for the existence of a Transmission Company of Nigeria after the dis-integration of the SO and the TS.”
However, the House has yet to consider and approve the report. Members were to consider the report on Tuesday, but later deferred it to another legislative day.
The committee also recommended that NERC should conduct an audit of the electricity delivered by operators and the revenue collected from consumers since October 2013.
The report stated, “That the House should mandate NERC to conduct a retroactive forensic audit and investigation of electricity delivered, invoiced, revenue collected and settlements made to the market participants from October 1, 2013 to date.
“This exercise will unveil the leakages and the culprits will be required to refund misappropriated funds.”
The panel heavily criticised NERC, noting that it performed below expectations in playing its regulatory role in the power sector.
It observed that the failure of NERC to enforce regulations had allowed operators to run the sector in whichever way that suited their own interest to the detriment of the Nigerian power consumer.
The report further stated, “That NERC has failed to enforce its authority as a regulator by applying appropriate penalties and sanctions to defaults by market participants. This has resulted in laxity in compliance with the rules, regulations and orders instituted by the agency.
“NERC regulation of market participants must be on real-time basis rather than periodic request for information. Responsible supervisory officers must be assigned and charged with the task of ensuring compliance.”
On tariff, the report stated that it must be automated immediately to “correct the anomalies in the parameters and assumptions in deriving the tariff.”
It added, “Electricity tariff reviews must be in accordance with statutory provisions and consultations with all stakeholders. Consumer protection is very important, both on pricing and service delivery.
“The electricity tariff framework must be automated and made full-proof of human manipulation.”
On the N2.7bn severance package for the NERC commissioners, the report noted that the committee adopted the remuneration packages as outlined in Section 42(1) (a) of the EPSRA.
The report added, “The immediate past NERC commissioners should be paid their remuneration packages in accordance with Section 42 (1) (a) of the Electric Power Sector Reform Act and in line with the presidential approval of November 2006.
“However, the statutory position of the remuneration of future commissioners must be determined with respect to the standards set for such agencies by the National Salaries, Income and Wages Commission and Pension Commission of Nigeria to avoid the ambiguities of the past.”
Meanwhile, the House in a separate resolution asked the Federal Government to check what it called “indiscriminate exploitation” of Nigerians by power generation and distribution companies.
A member, who moved a motion on the issue, Mr. Murktar Dandutse, called for investigation into the pledges made by the power generation and distribution firms when they took over the sector to ascertain the level of compliance with their investment promises.
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