The Nigerian Electricity Regulatory Commission will announce new tariffs in April, while the winding up of Power Holding Company of Nigeria’s operations may be concluded by the first quarter of the year, the Presidential Task Force on Power has disclosed.
A report by the task force on the implementation of the road map for power sector reform said that NERC had initiated studies and consultations to determine a level of tariff that would stimulate investment by making it possible for investors to recover their costs.
It added, “New tariffs will be announced by April 2011.”
Analysts expect that the tariffs will go up to a cost-reflective level to stimulate private sector investment in the electricity business.
An average customer currently pays about N5.90 per kilowatt hour for electricity.
The task force also said that the Federal Government might conclude the winding up of PHCN’s operations by the first quarter of this year.
It stated that the process of winding up the company was already on and that it might be concluded by the end of the first quarter.
The report said, “This process is underway. Headquarters’ members of staff have started moving out to the Ministry of Power or to successor companies. Functions are being transferred to individual successor companies. The eventual winding-up will be a legal or court-ordered formality, occurring when ongoing staff movements and transfer of assets and liabilities are concluded, probably during Q1 2011.”
It added, “The 11 distribution, six generation and one transmission companies now have individual budgets. The companies are now de facto independent entities, thus putting the PHCN in winding-up mode. All of the PHCN successor companies are set to enter the ‘Transition Stage’ of the reform when they will buy and sell electricity based on contracts agreed with each other and stop operating as part of a government monopoly financed through a common budget and obliged to provide power or electricity evacuation services to each other without payment.
“This will create incentives for the power companies to provide service to as many Nigerians as possible and as frequently as possible, so they can earn money to pay for their inputs and operational costs.”
The task force stressed that the implementation of the reform would continue apace and that by mid-2011, an appreciable proportion of generating and distribution capacities would have been transferred to the private sector.
It said, “New private generating capacity would have been fully contracted and under procurement, the transmission grid would be privately managed and a reinvigorated regulator would be actively ensuring long-term sustainability of a private sector-led Nigerian electricity supply industry.”
The task force said it was committed to replicating the success that Nigeria recorded with the liberalisation of the telecommunications sector in the power sector with all the potential it had for a far more fundamental impact on job creation and economic growth.
It said that political support from the highest quarters of government had not flagged, noting that regardless of the increased tempo of electioneering, there was continued pressure, not only from the government, but also from manufacturers, the media, civil society groups and others on the task force to deliver tangible results to Nigerians.
Source:http://www.punchng.com/
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