In the presentation at the public hearing to obtain stakeholders inputs organized at NERC Corporate HQ, Abuja, Mr Ahmed Tukur reported that the commission has studied the operating models of ISOs in Europe, US, Australia and India and seems to prefer a small ISO model to a large one which represents the current practice in TCN where in all substations are controlled by System Operator’s staff.

A small ISO model would only own the national control centre, regional control centres and also control the high voltage system. It would not control the transmission substations. If the model was adopted, the ISO would not have direct interface with the distribution companies and it will also require strict separation from TSP and therefore its implementation would require organizational transfer of assets to the unbundled companies.

Several participants including the MD/CEO, TCN, Mr Paul Stefiszyn spoke in favour of the large ISO. He said a small ISO as envisaged by NERC would be effective when the present system has developed and necessary remote command technology of substations is fully in operation.

 

The representatives of Abuja Disco posited that the creation of an ISO should wait until the market developed substantially, insisting that its immediate creation would increase transaction cost in the industry.

The representatives of Port Harcourt Disco supported the idea if its immediate creation would bring on board value addition and also lead to the resolution of existing critical problems in the field.

 

The other issue that was discussed during the public hearing was the desire of NERC to formulate policy on capping the estimated bill, electricity distribution companies can give a customer without functional energy metres.

 

In the presentation to guide the public hearing, Mr Shittu Shaibu discussed the imperatives of customers having functional energy meters to facilitate effective billing and efforts of NERC to make the distribution companies provide meters such as the 18 months phased commitment to meter customers as well as the CAPMI program which the Discos seem to have jettisoned. According to Shaibu, NERC’s desire to cap bills for customers without meters was another intervention of NERC to incentivize the Discos to aggressively meter all customers and thereafter produce bills that are least questionable.

 

Customers and consumer groups’ representatives at the hearing were all in support of the proposed capping policy. For them, the policy would check the excesses of the distribution companies who are benefiting from the huge and spiraling estimated bills they give to the customers on monthly basis. According to them the distribution companies have always frustrated every efforts of NERC to get metres to customers.

 

The distribution companies argued that the proposed capping policy, if approved, would produce unintended negative consequences such that some metered customers would tamper with their functional metres so that they can be placed on the capped estimated platform with anticipated lower tariffs. They were also of the opinion that the new policy would be against the service/performance agreements signed with NERC and as such could negate the provisions of the cost recovery tariffs put in place by NERC to encourage investors.

 

The NERC Chairman along with other commissioners submitted that the public hearing was the first level of consultations to gathering information that would lead to making sector-wide policies on the two issues. He assured the public that NERC does not have any pre-conceived position on any of the two issues and that several other discussion platforms would be carried out before final decisions on them are taken and that such decisions when applied would be beneficial to all stakeholders.