The Nigerian Electricity Regulatory
Commission has issued regulations enabling communities and local
governments to generate and distribute electricity within their areas. One of the two regulations, titled,
“NERC Regulation on Embedded Generation 2012,” and issued on March 7,
2012, permits investors, communities, states and local governments to
generate and distribute electricity for their exclusive consumption
using facilities of existing electricity distribution companies or
independent electricity distribution network operators.
Another regulation, issued on the same
day, titled, “NERC Regulation for Independent Electricity
Distribution,” permits communities, local and state governments to
invest in electricity distribution networks in areas without access to
the grid or distribution network or areas poorly serviced.
Thus, state governments with investments
in infrastructure for power generation and distribution can now begin
to distribute electricity. Also, according to the new regulations,
states and local governments with enough financial capability, can now
take fuller advantage of the regulations to provide adequate power for
their constituents.
The Electric Power Sector Reform Act,
which established the Nigerian Electricity Regulatory Commission, is the
enabling law for the power sector reform. The regulations, according to
a statement posted on the website of NERC, are products of about six
months’ intensive research and stakeholder consultations by employees of
the commission. The regulations, the statement said,
were direct attempts to cater for about 40 per cent of the country’s
population without access to electricity. The regulations are also
capable of addressing the problem of poor quality of electricity supply.
Signing the two regulations,the
Chairman, NERC, Dr. Sam Amadi, said that they would provide the needed
solutions to the shortage in supply of electricity in the country. He said, “These are the most important
regulations today in this country because we do not have enough
electricity to go round. We also have so many constraints preventing us
from having enough to generate, transmit and distribute.
“From now on, the much expected
expansion in the electricity supply to the end- users would be easily
realisable. With these regulations, we have further unlocked the
opportunities in the sector to community, private and government
participations. The laws are expected to revolutionise the sector.”
He enthused further that the appropriate
tariff to encourage the use of renewable and alternative sources of
power generation would soon be put in place by the commission. Amadi
commended the efforts of the officials of NERC that were able to put
together such regulations after due consultation with industry
stakeholders. He said that similar efforts in the past would have been contracted out to consultants at a huge cost to the commission.
Meanwhile, Amadi also told Newsmen on the telephone that the new electricity tariff would take effect on June 1. Also, the NERC had recently warned
electricity distribution companies not to charge their customers rates
outside what was approved by it last year before the introduction of the
new tariff.
The warning came on the heels of
increasing number of petitions and complaints received by the commission
that some of the distribution companies were cashing in on the recent
media reports over planned increase in the electricity tariff and
charging their customers rates other than those approved by the
commission.
Reacting to the development, Amadi said,
“No tariff increase has been announced. Chief executive officers of
distribution companies who collect tariffs beyond what was approved last
year are operating in disobedience of the industry’s regulations.” “It is an offence to charge rates
outside the approved tariff regime. Any errant distribution company will
be made to refund its customers money collected in excess of the
approved tariffs,” Amadi added.
He said that NERC would not spare any
chief executive officer of errant electricity distribution company as
applicable sanctions stipulated in the Electric Power Sector Reform Act
2005 would be meted out on those acting in defiance of the Act.
The chairman said that the commission
was harmonising submissions made in the course of stakeholders
consultations held towards the planned tariff regime and that the final
figures would be announced through the media, to put both the customers
and operators on notice.
The existing tariff regime is the last
schedule of Multi Year Tariff Order that was announced last year and
will pave way for MYTO II this year. The MYTO is the model used in
calculating prices of electricity. It was introduced in 2008 by NERC to
replace the rule of the thumb practice in determining prices of
electricity.
The new tariff, taking effect on June I,
is part of the many measures being taken by NERC in conjunction with
the BPE to ensure a successful privatisation of the power sector.
It has been estimated that the country
needs an average of $10bn investments annually in the power sector for
it to realise its potential. The nation currently generate about 4,000
megawatts against demand in the region of 10,000MW.
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