As the Transitional Electricity Market (TEM) commences, all contracts entered into by participants during the privatisation of the power sector has now been activated, the federal government has said.
A statement issued yesterday by the ministry of power stressed that activities in the electricity market would now carry the full obligations outlined in the various contracts.
Consequently, the electricity market will now be governed by a framework of contracts, regulations, market rules, systems and processes as outlined in all vesting agreements, the statement said.
Before now, the market was driven by a set of interim rules initiated by the Nigerian Electricity Regulatory Commission (NERC).
The TEM is 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.
Minister of Power, Prof. Chinedu Nebo, disclosed yesterday that while the benefits of the power sector reform were expected to be gradual due to decades of neglect suffered by the sector.The commencement of TEM will increase the performance expectations for all the 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,” the minister noted.
He added that under TEM “all parties pay for services received and 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,” Nebo said.
According to the ministry, 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,” the statement added.