Politically speaking, the Electric Power Sector Reform Act (EPSRA), 2005 was enacted to permit private companies participate in the generation, transmission and distribution of electricity, and created the Power Holding Company of Nigeria (PHCN) as a precursor to the unbundling of the electricity sector with the aim of injecting efficiency into an otherwise underperforming sector of the Nigerian economy. PHCN gave rise to six generating companies (Afam Power Plc, Sapele Power Plc, Egbin Power Plc, Ughelli Power Plc, Kainji Power Plant, Shiroro Power PLC, with the last two under a concessional arrangement), eleven distribution companies (Ikeja, Eko, Ibadan, Benin, Port-Harcourt, Enugu, Abuja, Kano, Kaduna, Yola, and Jos) and one transmission company for the purposes of generating, transmitting and distributing power supply to the end-users.

Stemming from the above government reforms in the sector by the Goodluck Jonathan administration, subsequent administrations have been shaping and reshaping the sector in order to position it to meet the increasing demand for electricity by Nigerians. The Buhari government encouraged the existence of eligible customers and bilateral agreements whereby power stations enter into business arrangement to supply electricity to ‘eligible customers’ without the involvement of the Nigerian Bulk Electricity Trading (NBET).

Existing examples of this kind of arrangement include those between PARAS Energy, Odukpani, and Delta power stations with Benin Republic; Kainji power station with companies like KAM steel, Ilorin, Ashaka cement, Bauchi, Inner Galaxy, Port-Harcourt; Omotosho NIPP with Eko Disco etc. This arrangement suits the large and medium electricity users but excludes retail customers who are at the lower rung of the ladder, which is quite unfair!

In line with the above reforms, there is the need to remodel the existing arrangements between the DISCOs and their customers for effective power supply delivery. What obtains currently is like imposing monopolies on the customers because they are stuck with the DISCO servicing their franchise areas and they don’t have alternatives to choose their preferred DISCO for power supply. Small customers should be able to vend their electricity from any DISCO of their choice regardless of their physical location.

In implementing this reform, a lot of investment and creativity in areas of metering and interface points would have to be sorted out for proper accounting and to avoid chaotic situations.

With the latest reform that moved the sector from the exclusive list to the concurrent list, state governments now have the legal backing to participate in the sector and should therefore liaise with the DISCOs on how to fashion out workable solutions in this regard, which will translate to a true privatized regime. This will further enhance the aim of introducing efficiency into the power sector, which is the essence of unbundling the sector.

If well implemented, this arrangement will engender healthy competition amongst DISCOs who will be forced to wake up from their current lethargy and strengthen their networks so as to attract desired patronages and avail customers with the luxury to choose the DISCO to deal with.