- State governments of Edo, Delta, Ondo, and Ekiti have formally informed NERC about their intent to assert shareholder rights in BEDC due to operational deficiencies, aiming to improve electricity service delivery.
- They seek active involvement in BEDC’s decision-making processes to enhance operations, improve service delivery, and address electricity access issues, emphasizing their commitment to ensuring the welfare and development of their citizens.
The state governments of Edo, Delta, Ondo, and Ekiti have formally communicated with the Nigerian Electricity Regulatory Commission (NERC) regarding their intention to assert their shareholder rights in the Benin Electricity Distribution Company (BEDC).
According to the commissioners, the operational shortcomings and service delivery failures within the states have prompted the governments to exercise their shareholder rights in the Benin Distribution Company (BEDC).
A letter dated March 18, addressed to Engr. Sanusi Garba, the Chairman of NERC, signed by energy commissioners representing the highlighted states, stated that the purpose is to request a meeting. This meeting discusses the intention behind asserting shareholder rights to enhance service delivery to end-users in these states.
A part of the letter stated:
“The reliable provision of electricity to enhance the welfare and development of our people is a top priority for our governments. Therefore, we cannot overlook the crucial importance of ensuring that BEDC’s electricity distribution services meet the needs and expectations of our populace from now on.”
What does this action step mean?
In exercising their shareholder rights, the highlighted state governments intend to actively engage in the decision-making processes of BEDC, both at the board and management levels of the company. Their objective is to strengthen the company’s operations, enhance service delivery, improve operational efficiency, extend electricity access to unserved and underserved communities, and ultimately, revolutionize the electricity sector within our states.
The state commissioners clarified that at no point did the state governments grant Power of Attorney (POA) to either the Federal Ministry of Finance Incorporated (MOFI) or the Bureau of Public Enterprises (BPE) regarding their shareholding in the PHCN Successor Benin Electricity Distribution Company or the post-privatized entity.
Going forward
In the letter, the state commissioners stated that they have learned that NERC intends to initiate a regulatory takeover of BEDC by March 31, 2024. So, they request that the Commission formally notify the state governments involved before taking any regulatory action to appoint new directors and a management team for the company.
Additionally, they urged the Commission to promptly commence the process of unbundling BEDC into its operational areas along state boundaries. The state commissioners further assured NERC of their support and cooperation in exercising any regulatory action against BEDC and its Core Investor, provided their rights as shareholders in the Company are not breached.
Is this justified?
On Wednesday, March 20, Odion Omonfoman, the Chief Executive Officer of New Hampshire Capital Limited, told the Electricity Hub that having direct representations from the four states under Benin DisCo on the Board and management is a welcome development. He said that one of the mistakes of the privatisation drive is excluding state governments from having any representation on the Board or management.
According to him, issues of electricity theft, meter bypass, and vandalism are issues that the state and local government can address. He said, “Other issues like the quality of customer service, enforcing standards and customer rights are better done at the state level. If states claim shareholder rights in utilities they have equity in, it is long past due, and I think it is high time that it happened. Again, the Electricity Act also creates state electricity markets, so it is a good sign and is supported under the Electricity Act.
He suggested that more states should start to claim their shareholder rights in the utilities that operate within their states’ territories, and this should spark an improvement in service quality. He stated further that aside from federal government interventions, states have invested largely in power utilities in the country by providing feeders and transformers.