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Nigeria : Shadie Okpako

Mission Statement
There is the need for the de-regulation of the Power Holding Company Nigeria (PHCN) to allow for sustainable Power Generation, Supply and Distribution in Nigeria. One emerging company that is interested in the power distribution sector is called BENSHA Services. It is exciting to read about what Geometric Power Ltd has started to do in Aba by developing its own Independent Power Project (IPP). It is going to be the combination of activities of similar companies operating in different parts of the country put together that can solve the problem of incesant power failure in Nigeria. That means, Power supply MUST be de-regulated to allow private operators to get involved.
HeadQuarters: Djakpa Road Effunrun
Organization Contacts
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Organization Details

The present PHCN (former NEPA) should be deregulated and privatised but leaving it with the powers of regulating the activities of all the organisations and companies that will emerge. This will be like the NCC that is regulating the activities of MTN, V-Mobile, Global com, etc. in the telecom sector.


After de-regulation, then the sector needs to be divided into three main parts for effectiveness and efficiency.

The three Divisions shall be:

1.) Power Generation, 2.) Power Supply and 3.) Power Distribution:


These 3 main Divisions with each one having subsidiary organisations/companies. Each one has its own role but not exclusively and some form of overlap permitted.  I shall explain this in more details.

1.) Power Generation Authority/Commission (PGA) or (PGC):
 
This organisation will be responsible for purely generating power for the nation. The present hydro and thermal generating plants will be under this Authority. It will also look into the other sources of power generation and not limiting itself to just few sources. Other sources include power generation from: Solar Energy, Wind Power and Marine or Ocean energy. There are many foreign companies that are ready to come to develop these services in Nigeria if they receive the backing of Nigerian government. These new form of power generation will be added to the ones we already have in place.

This new corporation/authority (PGA) will be responsible for maintaining the existing plants and installing new ones from companies that will come up with new sources of power generation. PGA shall not control the domestic transformers. Those will become the properties of the Supply Authority. Power generation should be all that this corporation should do and not beyond this level.

2.) Power Supply Authority (PSA): 

This will be responsible for maintaining the national grid, all substations and domestic transformers. PSA will be responsible for building new substations as the economy requires. They will buy energy from (PGA) at controlled rate as set by PHCN.  The essence of this is that of checks and balances. PHCN has to set guidelines that PGA must follow to ensure that there is constant generation of power for adequate supply to all parts of the nation without fail.  Then PSA has to pay for the power it is going to supply so that PGA has enough money for remaining in business they are set up for. But again, the price has to be set by an external body so that PSA is not held to ransom by PGA setting too high prices.

3.) Power Distribution Services (PDS):

This organisation will be an umbrella for other companies that will emerge for the Power Distribution. PDS shall be responsible for maintaining the domestic meters and feeder domestic lines. They shall not own any transformers but will pay rent for their use. PDS will buy power in bulk from PSA and sell to the various companies that will emerge for the retail chain. These companies will be the ones that will have direct contact with consumers: individuals and companies. There shall be many outlets for this to be effective. But again, the companies are to be regulated by PHCN and controlled by PDS who will design the strategies for ensuring the quality and standards of power distribution is kept at its highest level at all times. The price (rate) will be set by PHCN so as to ensure affordability by consumers.

Caution:
Room should be given for healthy competition among the various distributors. Taking example from the telecoms again, we see that they are controlled within limits to which they can fix their tariff. But within that limit, MTN has its own strategies of attracting its customers, V-Mobile has its own strategies and so also Nitel and Global etc. Such will be the situation with the companies under PDS.

In other words, companies distributing electricity to the cities and villages could operate side by side each other without interference just as we see MTN, V-Mobile, Glo, etc all operating side by side each other and no one  given any exclusive area at the expense of the others or to stiffle competition. Healthy competition should be encouraged for higher standard of service provision and better customer services. The terms for setting up a Distribution company should be set by PHCN while PDS sets the trading terms. Any company or corporation that meets these requirements to distribute electricity should be permitted to do so.

Note:

For example, in the UK, power generation is by Powergen. The supply power is by National Grid and distribution is done by many other companies such as British Gas, British Telecoms, EDF Energy, Southern Electricity, Scottish Power, etc. This allows for healthy competition to the advantage consumers and better service provision 

Area of overlap: 

There can be occasions whereby one corporation comes up with an idea to improve on the services of the other corporation or has a strong marketing point of another product. They should be allowed to compete on equal grounds as all others. For example, PSA may want to be involved in distribution as well as supply by forming a distribution company. They should be allowed to do so; provided they come to the same bidding market as all others and they are not given any preferential treatment. Like the example of UK mentioned above in the note, Powergen who actually generates the electricity also has a division of supply side by side all the others and they don’t use unfair advantage to drive under the other companies.
 
Effects of this split of PHCN:

As we can see from the above, the split:

· Will allow PHCN to supervise, control and monitor the other authorities/companies. (This is likened to the expression of “eagle eye” position). Being high up and distant from day to day supply/distribution issues gives room for effective control.
· This will allow for effective and efficient management and administration of each organisation to be focused and result oriented.
· This will lead to efficiency and effectiveness overall at all levels.
· Since the organisations are different from PHCN, there will be proper discipline among the operators and discipline against any defaulting organisation will be possible without fear or unhealthy favour.
· It will make the other authorities to sit up knowing well that they are being monitored from above.
· This will make room for serious business operation and no room for laxity as we see with erstwhile government corporations.
· Since the performances and activities of each organisation means its own success and the success of the organisation(s) on which it is dependent, there will be proper revenue collection made as opposed to the present heavily corrupted situation of no proper accountability.
· And there will be proper records kept about revenue.
· There will be proper accountability.
· The rate being fixed by PHCN will make prices to remain affordable to consumers
· And since each organisation is focused and specialised in their field, there will be constant supply of electricity to the people of Nigeria as opposed to the present epileptic situation.
· And finally, more employment will be generated for the population especially the unemployed graduates.






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