The transparent bidding process set up by the BPE took care of the first cause of failure. The regulatory framework established by NERC hopefully takes care of the second cause of failure.
The bidding was conducted in the context of the structure of regulations and industry agreements which the regulator helped to put in place. These documents effectively allocated risks in such manner that investors were encouraged to bid for the PHCN successor companies. The MYTO model which the regulator published is the peg around which the long-term investment plans and loss reduction strategies of the bidders are based. With the backing of President Jonathan and the support of the Ministry of Power, NERC put out a tariff structure that promised cost recovery for investors without compromising efficiency and fairness in electricity supply. With a cost-reflective tariff in place, bidder crossed the threshold of fear.
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