The Debate on the Regulations of Tariff in the power sector has been rife in recent years and now Professor Frank Nwoye Okafor, Commissioner, Engineering Standards and Safety, Nigerian Electricity Regulatory Commission, NERC has joined the conversation by stating that internationally, regulators have developed various methodologies to determine appropriate revenue levels required by regulated entities involved in the generation, transmission and distribution of electricity, arguing that the revenue to be earned by a utility should be equal to the efficiently incurred cost to supply electricity.
Professor Frank Nwoye Okafor, Commissioner, Engineering Standards and Safety, Nigerian Electricity Regulatory Commission, NERC, said that there is general agreement that appropriate tariffs are essential to any rapid development of electricity supply.
Speaking at the Nigerian Academy of Engineering lecture, held at the University of Lagos he further Emphasised the need for effective regulation of the sector, Okafor said that governments throughout the world engage in three main activities such as taxation, spending, and regulation, pointing out that regulation is the least understood, insisting that the quality of a regulatory agency is determined primarily by the quality of its governance.
“a well designed regulatory framework protects consumers from monopoly abuses and investors from arbitrary political action and provides incentives for efficient operation and investment in the power sector. “The product of effective regulation directly or indirectly improves the performance of the power system by ensuring adequate capacity additions for power procurement from conventional and renewable sources to meet the projected demand.”
His points were further echoed by, Mrs Joanna Maduka, President, Nigerian Academy of Engineering, said that electricity is the pivot of development.
He stated: “Concerning our infrastructure, one would not have the slightest hesitation to state that no other issue is of greater concern or interest to the public than the state of our electricity supply in the country.
“Manufacturers and other businesses have consistently cried out on the huge negative impact of the current poor power supply on their operations. As a result, many businesses have relocated, and some others are at the verge of relocating to other countries or closing down their operations in Nigeria because of high electricity and energy cost. “Nigerians in general have also persistently complained, not only of poor supply of electricity, but also of what is now popularly described as crazy bills from electricity distribution companies”, NAE president stated.