Power policies :: Good governance

In control systems, a governor is a device that is used to measure and regulate the speed of a machine in order to maintain stability within the system while it achieves its objectives. My first field experience with a governor system was at a hydroelectric power plant, where it was used to regulate the speed of the generator through constant system monitoring and adjustment of the water inflow that drives the turbines. The mechanisms behind its operation is interesting and can be imagined through the animation below. However, the scope of this post will be focused on the reason behind the concept itself.

The governor does its actuations right around the turbines Source: @ Google Images

However, the concept of good governance is in fact mostly used in the public administration of an economic system (or an economy). In an economic system, policies are used to regulate activities. Much like governors, they are a set of defined rules devised with the purpose of keeping the economic system progressively stable towards a projected roadmap or vision.

The Nigerian power (grid) system comprises of multiple Generating companies (GenCos), the Transmission Company (TCN), multiple Distribution companies (DisCos) and millions of Consumers. This categorization is indicative of a typical value chain where electricity is the commodity and the executive stakeholders are the producers, the wholesalers, the retailers and the consumers.

To ensure good governance in the flow of electricity across the economic value chain of the power system, the federal government (via the Ministry of Power) assumes the oversight role of issuing policy directives that guide and respect the operating limits of the system and also sets up the required commission (Nigerian Electricity Regulatory Commission) to regulate these policies. The objectives of government generally include broad items like:

– To provide an enabling and safe environment for ALL stakeholders.
– To promote a fair and competitive market for businesses
– To encourage increased productivity with respect to the capacity and capability of the system.
– To protect the rights of electricity consumers as law-abiding citizens.
– To sanction illegal, criminal or corrupt activities.
– To regulate the entrants of new players and investors into the market.

A system setup like this is fundamental to most commercial value chains i.e. the players in their different sides and positions… and then the regulators to maintain the values of the system. Same player-regulatory relationship even does apply to other systems that are guided by rules and regulations.

A more familiar example on this concept is the game we all love: ‘Soccer’.

Standard Soccer Field Source: @ Google Images

A standard soccer pitch is bounded by visible white lines, which guide the range of the ball transactions. There are also lines inside of the pitch to control and the flow of the game. Imagine if those lines were not in place and there were no boundaries to which the game is played, then everything about the game will be out-of-control and it won’t be fun to play or watch. Furthermore, there are officials involved in the regulation of the game. They are the custodians of the rules of the game, which are typically with respect to the lines, poles/bars and corner flags on the pitch… and other aspects related to the duration and conduct of play. They apply these rules in making decisions that regulate the flow of the game.

In the Nigerian Electricity Supply Industry, all of these entities do exist too, however, there is a need to further introduce into governance, good people with the required capacity, who are sticklers for discipline in the implementation of policies. There is also the need for stakeholders (including consumers) to value compliance with the industry rules and standards, just as much as productivity and profit/savings are esteemed.

Ultimately, there is a need to transform our thinking towards a whole new way of doing business. Clean and reliable tech goes best with clean societies with good governance.

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