Power sector market contracts come to effect from January 1, 2015 says Minister of Power.


– Report from Ministry of Power, Abuja.

Prof. Chidi Onyia, the Chief of Staff to the Minister of Power, Prof. Chinedu Nebo, has disclosed that while the benefits of the power sector reform are expected to be gradual due to decades of neglect suffered by the sector, the commencement of The Transitional Electricity Market (TEM)  will increase the performance expectations for all the new market participants and facilitates the much needed discipline in the market.  “It demonstrates that the power sector is maturing and advancing in the right direction under the right conditions, within the right environment.”

The Transitional Electricity Market (TEM) is a critical milestone in the power reform process since November 1, 2013 when power generation and distribution assets were handed over to the new owners. With the commencement of TEM on January 1, 2015, all contracts entered into at privatization are to be activated and activities in the electricity market  will carry the obligations outlined in the contracts.  A framework of contracts, regulations, market rules, systems and processes will drive the electricity market under TEM.

Prof. Onyia went on to say under TEM, “all parties pay for services received and are paid for services rendered.” Unlike before, there are consequences for market participants who fail to deliver on contracted services. “It is expected that the activation of contracts will lead to market behaviour that will produce sustainable and comprehensive electricity supply to Nigerians”, he disclosed.

On additional implications of this to Nigerian electricity users, the Professor said, “As it is in other climes, tariff will adjust automatically when there are changes in key market inputs such as gas within a regulatory framework.  He added that tariff adjustments will occur to attract needed investments and NERC, in its role as the power sector regulator, will ensure that there is no abuse of market power or exploitation of its customers.


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