Electricity Must Be Paid For, Not Free — NERC Commissioner

The Nigerian Electricity Regulatory Commission (NERC) has rejected the notion that electricity is an inherent right that should be provided free of charge, saying the power sector requires sustained investment and commercial viability.

NERC Commissioner for Legal, Licensing and Compliance, Dafe Akpeneye, stated this during a breakout session, “Let There Be Light”, at the Nigerian Bar Association (NBA) Annual General Conference.

Akpedeye said the cost of generating, transmitting and distributing electricity made payment by consumers essential to sustaining the sector.

“There is nothing that says that you are entitled to power,” he said.

He likened electricity to petrol, noting that consumers understood they had to pay for fuel before using it.

“You cannot go to a petrol station and say it is intrinsic for me to get 50 litres from you. If you don’t pay, you are in trouble,” he said.

The commissioner said investors would be unwilling to commit capital to the sector if they could not recover the cost of providing electricity.

According to him, every megawatt of a 10-megawatt power plant costs about $1 million, while a kilometre of a 330-kilovolt transmission line could cost about $1 million and a kilometre of a 132-kilovolt line about $400,000.

He, however, said government must establish mechanisms to protect vulnerable consumers while ensuring that the wider electricity market remains commercially sustainable.

Akpeneye also said a lawsuit challenging an electricity tariff review stalled NERC’s ability to review tariffs for about four years, contributing to a significant revenue shortfall in the electricity market.

He said the suit, filed in 2016 by lawyer Toluwani Adebiyi, challenged a tariff review conducted by the commission.

“For four years, NERC could not review tariffs. Because it could not review tariffs, we have this shortfall that you are seeing,” he said.

He said the experience prompted NERC to intensify efforts to sensitise members of the judiciary to the technical and commercial realities of electricity regulation.

The commissioner also blamed some of the sector’s challenges on the decentralisation of electricity regulation, saying Nigeria was dealing with the complexities of breaking up a previously centralised electricity market.

He said electricity networks were not originally designed around state boundaries but around serving customers, warning that regulatory fragmentation could lead to multiple electricity laws and regimes.

“The electricity is specified in the Constitution in the concurrent list, and it is a bifurcated concurrent list,” he said.

Akpeneye called for clearer interpretation of the Constitution and stronger coordination between federal and state authorities to minimise regulatory conflicts.

He also cited the financial difficulties of Kaduna Electricity Distribution Company, saying the company had accumulated almost N500 billion in liabilities.

He said the situation demonstrated the risks of requiring investors to sell electricity below the cost of acquiring or producing it.

Akpeneye also called for stronger enforcement against electricity theft and other forms of market indiscipline.

“There has to be consequences. We are where we are today because there are no consequences for actions that we take,” he said.

The Deputy Vice-Chancellor of Afe Babalola University, Ado-Ekiti, Prof. Damilola Olawuyi (SAN), said inadequate electricity supply was also undermining access to justice.

Olawuyi said modern courts increasingly depended on electricity to operate computers, digital recording systems and electronic case-management platforms, meaning blackouts could disrupt proceedings and judicial administration.

He said the estimated 27.9 million Nigerian households without access to electricity demonstrated the scale of the challenge.

The professor urged lawyers and policymakers to pay greater attention to power sector reform, stressing that reliable electricity was essential not only for households and businesses but also for the administration of justice.

“It is a sector that requires holistic reform that will make it investor viable,” he said.

Olawuyi identified predictable and enforceable power purchase agreements as critical to attracting investment, saying investors needed confidence that contractual commitments would be respected.

He also called for measures to de-risk investments, improve infrastructure and tackle insecurity, which he said could discourage investors from committing capital to the sector.

“The bottom line is that we need a smart mix of approaches that integrate justice considerations into power sector reform,” Olawuyi said.