21 May 2017, Sweetcrude, Abuja – The Nigerian government has given electricity generating companies operating in the country the go-ahead to sell electricity directly to consumers and this will take effect from the 15 May 2017.
This was disclosed in a statement released by NERC’s head of public affairs, Dr. Usman Arabi.
The statement cited a declaration titled ‘eligible customers’ endorsed by Minister of Power, Works and Housing, Mr. Babatunde Fashola
NERc explained that the declaration was legally backed by the provisions of Section 27 of the Electric Power Sector Reform Act 2005 (EPSRA), and represents a major policy directive which now grants electricity consumers under this category the right to buy power directly from Gencos without any encumbrance.
Under the regime, there are four categories of eligible customers to become operative in the Nigerian Electricity Supply Industry (NESI).
The first category of eligible customers comprises a group of end-users registered with the NERC and whose consumption is not less than two megawatts (MW) and connected to a metered 11kV or 33kV delivery point on the distribution network. This group would, however, be subjected to a distribution use of system agreement for the delivery of electrical energy.
The second category of eligible customers are those connected to a metered 132kV or 330kV delivery point on the transmission network under a transmission use of system agreement for connection and delivery of energy.
The third category of customers under the declaration consists of those with consumption in excess of two megawatts on monthly basis and connected directly to a metered 33kV delivery point on the transmission network under a transmission use of system agreement.
It added that eligible customers in this category must have entered into a bilateral agreement with the distribution licensee licensed to operate in the location, for the construction, installation, and operation of a distribution system for connection to the 33kV delivery point.
The fourth category, according to regulatory agency are eligible customers whose minimum consumption is more than two megawatts over a period of one month and directly connected to the metering facility of a generation company, and has entered into a bilateral agreement for the construction and operation of a distribution line with the distribution licensee licensed to operate in the location.
“The declaration which permits electricity customers to buy power directly from the generation companies is in line with the provisions of Section 27 of the Electric Power Sector Reform Act 2005 whereby eligible customers are permitted to buy power from a licensee other than electricity distribution companies,” NERC said.
“In exercising the power conferred on him by the said Act, the Honourable Minister of Power Works and Housing, directed the Nigerian Electricity Regulatory Commission (the Commission) to permit four categories of customers to buy power directly from a licensee other than electricity distribution companies,” NERc added.
“The declaration further provides that at least 20 percent of the generation capacity added by the existing or prospective generation licensee to supply eligible customer must be above the requirement of the eligible customer and is supplied under a contract with a distribution or trading licensee at a price not exceeding the average wholesale price being charged electricity distribution companies by the Nigerian Bulk Electricity Trader Ltd.
“The conditions for the declaration of an eligible customer are subject to review by the Nigerian Electricity Regulatory Commission from time to time,” it added.
The Association of Power Generation Companies (APGC) which represents the interests of Gencos in a reaction stated that it was a welcome development.