More from Law Inter Alia Blog

Ayisha from Law Inter Alia;s response to our comments and our follow up.

Ayisha
"Creative Energy you are right about power generation being decentralised under the 1999 Constitution but isn't the interpretation of the relevant sections in doubt if State generating and distributing power have to go through a federal agency such as NERC? what was the story between Lagos and FGN regarding the Enron barge during TInubu and Obasanjo's time? Why is there a limit to what states and IPPs can generate and distribute outside of the national grid? I also agree about unbundling but as long as we do not solve the gas problems and the 'price of electricity' problems (the FGN is the largest customer and I dare say biggest debtor of NEPA) and have a proper legislative framework in place...unbundling will do little for us."


Creative Energy


There is actually no limit to what the States can generate and distribute outside the national grid. The main problem is that the cheapest (and probably the most efficient) way to distribute power generated is through the existing national grid. The costs of developing another grid, which is isolated to a particular state or neighboring states is likely to be very high (perhaps prohibitive), which is why States like Lagos, who have tried to organise power generation, have passed this power on to the national grid for transmission and distribution. The controversy between Lagos and the Federal Government was essentially that Lagos wanted the power being generated by Enron (and being transmitted to the national grid) to be isolated to Lagos State i.e. that Lagos State should get the additional 300 or so MW being generated. My vague recollection was that the FG initially agreed to this but later reneged. The problem appears to be that the FG (being in control of the national grid) may want to allocate electricity in a politically expedient fashion.