By Etuka Sunday
The Chief of Staff to the Minister of Power, Prof. Chidi Onyia has said that the Transitional Electricity Market (TEM) which took effect from yesterday would bring the needed discipline in the electricity industry.
In a statement by the Deputy Director, Press, Ministry of Power, Timothy Oyedeji, Prof. Onyia explained that TEM was the most critical milestone in the power reform process since November 1, 2013 when power generation and distribution assets were handed over to the new owners.
According to him, with the commencement of TEM on January 1, 2015, all contracts entered into at privatization would be activated and activities in the electricity market will carry the obligations outlined in the contracts.
“A framework of contracts, regulations, market rules, systems and processes will drive the electricity market under TEM. This milestone has never been achieved in the Nigerian Electricity Supply Industry, before now,” he said.
He disclosed that while the benefits of the power sector reform are expected to be gradual due to decades of neglect suffered by the sector, the commencement of TEM increases the performance expectations for all the new market participants and facilitates the much needed discipline in the market.
“It demonstrates that the power sector is maturing and advancing in the right direction under the right conditions, within the right environment”.
He stated that under TEM “all parties pay for services received and are paid for services rendered.” Unlike before, there are consequences for market participants who fail to deliver on contracted services. It is expected that the activation of contracts will lead to market behaviour that will produce sustainable and comprehensive electricity supply to Nigerians.
As it is in other climes, electricity markets around the world, tariff will adjust automatically when there are changes in key market inputs such as gas, however, within a regulatory framework. Furthermore, tariff adjustments will occur to attract needed investments and NERC, in its role as the power sector regulator, will ensure that there is no abuse of market power or exploitation of its customers.
Prof. Onyia explained that the new transitional electricity market will protect electricity consumers from market inefficiencies by ensuring that market contracts are adhered to while liabilities will be allocated to the appropriate contracting parties. “Unfortunately, over all, Nigerians have been deprived of this necessity for far too long. We urge fellow Nigerians to join us in this reform process by paying their electric bills, and to report any fraudulent activity or act of vandalism of their electric power infrastructure to the appropriate authorities.”