The Flurry of Activity in the Electric Power Sector: Understanding the Issues- A key challenge in the Electric Power Sector has been liquidity. Consumers complain about insufficient power & poor metering leading to estimated billing & crazy bills. @OmoKakafiala @iamtennygee

Investors have complained of low tariffs, which are insufficient to cover costs, speak much less of making a decent profit. @NERCNG, the Regulator, on the other side has been concerned about market indiscipline. There have been issues across the market. @tobiBowale @Dolarpo

Hence, NERC, as Regulator has been busy working with the Ministry of Power (Policy maker), to issue Regulations to achieve a number of things, including- (1) improving the attractiveness of the electric power sector to investors @EngrSMamman

(2) protecting consumers, such that improved tariffs are bench-marked against the quality of services provided to consumers (3) trying to enforce market discipline, especially on the part of the electricity distribution companies ("Discos"). @toluogunlesi @BBoason

Regarding the foregoing, NERC issued the Multi Year Tariff Order 2020 (the "MYTO") for individual Discos. The Order categorically prevents tariif increases for customers experiencing power supply availability of less than 12-hours per day over a period of 1 month. @channelstv

We will speak more around issues related to determining the 12 hours a day over a period of 1 month and how that is checked from time to time such that it is not a situation that is pretty much fixed. Mechanism is in place for adjustment(s). @arkazaure

The Order also reclassifies and disaggregates consumers and customer clusters on the basis of each Disco's commitment on its quality of service to customer clusters. There are now service classes which are categorized based on hours of availability of electricity per day.

In 'theory' too, each Disco has made service improvement commitments in connection with each group of consumers such that the classes that receive much less supply can see improvement over a period of time. And of course Discos have universal service obligations to consumers.

Additionally, electricity Discos have Performance Improvement Plans over specific periods which NERC can enforce. As I had mentioned, where the relevant Disco doesn't supply the average number of hours of electricity per day, after a 60 day period of evaluation, the tariff...

will be adjusted downward retroactively in line with the quality of service (number of hours of electricity availability). There are definitely several questions and doubts- Whether the less-privileged will have improved service levels with the current tariffs? Whether...

These tariff increases are jusifiable in current economic clime and world situation when other countries are providing palliatives rather than increasing cost of living? Whether the structure will work and encourage more investments or whether it will remain, business as usual?..

I am not sure I can answer all of these questions without sounding like taking sides, so your guess is as good as mine but a number of points- (1) we need to protect our poor and vulnerable and govt should take the current economic clime to take decisions.... @OmoKakafiala

(2) Alot of people already spend much more than the new tariffs self-generating electricity (3) the more attractive the power sector, the more investments & the jobs & better the quality of life people will have. Prices may ultimately go down, with competition @arkazaure

(4) @NERCNG needs to enforce its rules, the Performance Improvement Plans of Discos, Disco commitments under their universal service obligations, amongst others. @tobiBowale

Regarding market discipline and fulfilling remittance obligations, NERC is working to ensure that there is more market discipline, especially on the part of the Discos and they remit as and when due. There are sanctions for failure to fulfil obligations...

Discos are also required to provide unencumbered letters of credit to cover specific periods relating to their minimum payment obligations to NBET & MO. Additionally, the minsitry of power & the CBN are working with NERC to improve market discipline and remittances. @EngrSMamman

Specifically and very recently, the CBN instructed all Disco collections & remittances of the DisCos to both the TCN & NBET be the responsibility of banks providing guarantees to such Discos. This is helps improve remittances & market discipline to an extent...

It would potentially increase the funds available to fulfill loan repayment and other obligations to market participants. Overall, same could also improve, marginally, the overall attractiveness of investors in the sector but still requires further clarity!

I trust the foregoing has provided some insights into the goings-on in the electric power sector and some of what NERC is doing, especially around tariffs, remittances and market discipline/enforcement issues! @oladapoyusuf @DrJoeAbah @OgbeniDipo @Ifeyinwanene @farooqkperogi