NIGERIA LAUNCHES ELECTRICITY REGULATORY COMMISSION

UNCLAS LAGOS 001875

SIPDIS

DOE FOR DAS JBRODMAN AND CGAYE
TREASURY FOR ASEVERENS AND SRENANDER
USDOC FOR 3317/ITA/OA/KBURRESS

STATE PASS USAID FOR GWEYNAND AND SLAWAETZ
STATE PASS EX-IM FOR JRICHTER AND KVRANICH
STATE PASS OPIC FOR ZHAN AND JEDWARDS
STATE PASS TDA FOR NCABOT AND BTERNET

E.O. 12958: N/A
TAGS: EPET EINV NI ENERG
SUBJECT: NIGERIA LAUNCHES ELECTRICITY REGULATORY COMMISSION


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GON Launches NERC as New Electrical Power Regulator
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1. (U) Continuing its high profile campaign to reform the
power sector, the GON inaugurated the Nigerian Electricity
Regulatory Commission (NERC) on October 31. The 2005
Electric Power Sector Reform Act (EPSRA) mandates NERC
promote quality and efficiency in the provision of
electricity, and ensure fair and reasonable prices for
consumers. NERC is now the primary power sector regulator
in Nigeria. The Bureau of Public Enterprises (BPE),the
GON's privatization unit, sheparded the birth of NERC, and
BPE's experienced power sector team has transferred to NERC.
As the Power Holding Company of Nigeria (PHCN) is slowly
being unbundled for ultimate privatization, and new
independent power producers (IPPs) are established, NERC
will pick up from where BPE left off in reforming the power
sector. BPE has engaged the services of Mercados
Energeticos consortium, a South American firm, to prepare
NERC to operate according to global best practices in the
electricity supply industry (ESI).

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Industry Applauds NERC's Formation,
Dr. Owan's Appointment as Chair
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2. (U) Industry experts have applauded the appointment of
Dr. Ransome Owan as the NERC Chairman. Under his
leadership, they expect NERC be independent in formulating
and implementing policy. Dr. Owan has twenty years'
experience in the power sector in the U.S. Until his
appointment, he was the director of regulatory and external
affairs at Washington Gas Energy Services Inc., an affiliate
of Washington Gas Company, in the District of Columbia. He
managed regulatory and legislative compliance relating to
commodity retail sales to government, residential mass
market, commercial and industrial customers.

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Comment
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3. (U) A U.S. Trade and Development Agency power sector
consultant, (a former Assistant Secretary of Energy) and
Energy Off recently met Dr. Owan and his team of NERC
Commissioners during a recent definitional mission. Dr.
Owan has a clear vision for private sector participation in
the power sector. During conversation, he indicated he will
fiercely guard NERC's status as an independent regulator.
His return to Nigeria to take up the mantle at NERC is one
of the more hopeful signs in Nigeria's power reform effort.
However, NERC is a nascent organization, and most of the
commissioners do not have Dr. Owan's experience. NERC will
need significant institutional capacity building support if
it is to succeed at its appointed task of spearheading
reform of the Nigerian power sector.


4. This cable was cleared by Embassy Abuja.

Browne