Govt can’t Hands-off Power Sector For Now -Owan

The Chairman, Roundtable of Electricity Distribution Companies and former Chairman/Chief Executive Officer, Nigerian Electricity Regulatory Commission, Dr. Ransome Owan, in this interview with OKECHUKWU NNODIM, says the Federal Government’s stake in the power sector is still huge despite its privatisation

What is your view on the current power reform

In my humble opinion, the process is irreversible. It has been said that only a mad person does the same thing over and over again expecting a different result. This seminal action by the government to sell the Power Holding Company of Nigeria is one of the best things to happen to us all. But the real job now begins for all new owners and managers of distribution companies, generation companies and the Transmission Company of Nigeria. The entire value chain of generation, transmission and power distribution must work in perfect harmony so that the full gains of the power sector reform can be enjoyed. And since the Federal Government is 40 per cent owner in Discos, 20 per cent owner in Gencos and 100 per cent owner of the TCN, it can’t afford to walk away from the sector just yet.

Do you see sincerity on the part of the government in the privatisation process

The government is very sincere in this privatisation process and I honestly believe that the clock cannot be rolled back anymore. The reason I say this is because it has taken the government since March 15, 2005 to arrive at this stage. The Electric Power Reform Act was passed into law on March 15, 2005. It was enshrined that the government should get out of the business of electricity and bring in private owners. But to do that, several steps were taken. One of it was to create the sector regulator, market operator, up until when NEPA was divided into 11 companies of Discos, six Gencos and one transmission company. All were part of the law and the government was told to sell these companies to the private sector. So, we have actually gone very far, from March 15, 2005 to August 21, 2013 and you can see that it has been a very difficult process, but the government stayed by its promise and it has left everything to the private sector.

What do you think about ‘crazy billing’ by the power distribution companies

Consumers are right to be angry that they don’t get power as well as the issue of ‘crazy billing’. All of those things were dealt with when I was at NERC as the CEO. The anger will not immediately go away, except that they will find a new person to blame. If these new buyers do not quickly respond to their needs, consumers will not forgive them. That is why I ask all industry stakeholders to work together to solve the power problem because one arm cannot do it all. Those who should be more ready to do it are the Disco owners because they have consumers that are ready for the product but unfortunately, they cannot even find it to give to them. Generation is inadequate, transmission is inadequate and the companies that the Discos bought are still not fully okay.

 If this is the situation on the ground, how then can consumers enjoy the gains of the privatisation of the power sector

The first sympathetic point I will mention is that the new buyers have only inherited the problems of PHCN. But they’ve done so at great costs, almost $3bn had been paid to take over the business and that shows good faith and intent to solve the problem. Nobody will throw such huge sum into a business if he doesn’t want to make a change. Secondly, they want to know who the customers are in the system by giving them a meter, which is customer enumeration.

 After this, you decide the capacity or load of power that is needed. If the consumers want 10,000 megawatts and you can only give them 3,000MW, then there is a shortfall. You now take this quantum of power to generators for them to supply. At the same time, the generators will ask if you are credit worthy. And once you have the power, you sell to consumers that are metered and you get your money because you can now pay generators. This will lead to stability in the system because each segment: generators, transmitters and distributors can predict their income. Once there is stability, there will be great improvement in power delivery.

 As the chairman of the Discos’ Roundtable, what does your association stand for

Our association of 11 new Disco buyers shares a common goal of bringing steady power to all Nigerians. We are all aware of the obligation to serve and are ready to deliver on the promise. New buyers have together bought a failing business with a lot of promise.  Now, all must engage in expert business turn-around implementation of their strategies, subject to the approval of NERC and as set out in the transaction and industry agreements. We will work with our number one stakeholders, the consumers, among all to ensure that we know them well and give them satisfaction. We would also ask for some understanding that we have only bought the sector’s problems and are applying urgent measures to make a difference in the shortest time possible. This is the birth of an infant industry that will not squander the goodwill of the people.

 In terms of delivery, what level of confidence do you have in your members

Our members are resolute in making a permanent change in power supply in Nigeria. This is self-evident in the billions they have paid so far and in the billions more they would pay to make the business work well. But they cannot do it alone. It would have to be a collective effort starting with adequate generation of power, full transmission of power and complete distribution of power to customers. Our customers also have to do their part by paying for what is consumed and report any theft or wilful destruction of utility property. We also will depend a great deal on the good will and support of the governors to ensure peace and stability. Finally, we seek to work with the Federal Government and the sector regulator, NERC, for a continuously enabling environment.

What is your vision for steady power supply in Nigeria

I believe that soon, Nigeria will become a true plug-and-play society. That is to say, you buy a product from the box and plug it directly to the power outlet without a stabilizer or UPS and the sound of generators will be a distant past.

How will you describe your tenure as the first CEO of NERC

In our regulatory business, the Chairman/CEO was the apex position to occupy. Electricity regulation had not been done in our nation before. Therefore, the allure was too much to pass up when I was headhunted for the job from the United States. My team, comprising six commissioners from the six geopolitical zones, was peopled by competent professionals in their rights. Together, we laid a solid foundation that today has led to the total handover of PHCN to the private sector. Both ex-President Olusegun Obasanjo and former Minister of Power, Liyel Imoke, as at then, gave us full regulatory autonomy. I’m pleased to see that the tradition has continued till date. It votes well for systems continuity and our nation.

 What do you do now

I remain an industry expert and practitioner, offering advisory services to clients that include China/Nigeria coal and gas IPPs; I also render privatisation support, infrastructure and regulatory assistance. I have also founded Crane Infrastructure Company Limited to power the process. 

August 30, 2013