US embassy cable - 05LAGOS1875

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