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 -------------- -------------- GON Launches NERC as New Electrical Power Regulator -------------- -------------- ¶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). -------------- Industry Applauds NERC's Formation, Dr. Owan's Appointment as Chair -------------- ¶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. -------------- Comment -------------- ¶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