An Overview of the Current Electricity Regulations and Consumers Rights in Nigeria (2)

Electricity, Regulations, Consumers, Rights, Nigeria

By Ibrahim Ahmad Kala, LL.M

Continued from Friday

Having viewed from a glance, the regulatory frameworks in the power sector of the Nigerian economy, it is also imperative to bring to the fore, the regulatory authorities for the proper understanding of the power regime. These regulatory agencies include the following:

i. Federal Ministry of Power, Works and Housing.

ii. Nigeria Atomic Energy Commission.

iii. Nigerian Bulk Electricity Trading Company plc.

iv. Nigeria Electricity Liability Management Company.

v. Nigerian Electricity Regulatory Commission; and

vi. Nigerian Electricity Management Service Agency.

The main companies involved in electricity generation in Nigeria are:

i. Afam Power plc.

ii. Mainstream Energy Solutions Ltd.

iii. Transcorp Power Ltd (acquired Ughelli Power Plant).

iv. North South Power Ltd (acquired a 30-year concession for the Shiroro hydroelectric power station).

v. Cummins Cogeneration Ltd (signed a 300 MW PPA with Sapele Power plc).

vi. Pacific Energy (a subsidiary of Pacific Holdings Ltd, the owners of the Omotosho I and Olorunsogo 1 power plants).

vii. Shell Petroleum Development Company Joint Venture (Afam VI Power Plant); and

viii. AES Nigeria Barge Operations Ltd (Egbin Thermal Station).

While the Transmission Company of Nigeria (TCN) is one of the successor entities from the public utility unbundling and is the sole transmission company in Nigeria. It is also the sole transmission company in Nigeria and the only company which currently qualifies for the NERC regulatory licence for the construction, ownership and operation of electricity transmission networks. The TCN was licensed by the NERC and NESREA in 2006 and has operated as the sole transmission company in Nigeria since then. The TCN is in charge of managing the operation, maintenance and expansion of the 132 kV and 330 kV transmission systems.

The TCN’s functions are mainly delegated to the system operator and the market operator as follows:

i. The market operator is a TCN department which administers the wholesale electricity market and seeks to promote efficiency and competition; and

ii. The system operator is responsible for system planning, grid administration and management.

The last segment of the value chain involved in the distribution of power in Nigeria from the Transmission companies are the Distribution Companies sually called ‘Discos’, and which are as follows:

i. Abuja Electricity Distribution Co plc.

ii. Benin Electricity Distribution Co plc.

iii. Eko Electricity Distribution Company.

iv. Enugu Electricity Distribution Co plc.

v. Ibadan Electricity Distribution Co plc.

vi. Ikeja Electricity Distribution Company.

vii. Jos Electricity Distribution Company.

viii. Kaduna Electricity Distribution Co plc.

ix. Kano Electricity Distribution Co plc.

x. Port Harcourt Electricity Distribution Co plc; and

xi. Yola Electricity Distribution Company.

These Discos listed above provide the services of supplying electricity to consumers.

Under the Electricity Power Sector Reform Act 2005, all electricity generation, transmission and distribution services were unbundled. In 2001, the Federal Government began the phased and strategic implementation of unbundling the NESI, and divided operations in the NESI into generation, distribution and transmission industries (under the EPSRA) thereby enthroning a free market power sector economy.

Distribution Companies ( ‘DisCos’) are responsible for the installation, development and distribution of electricity within their franchise areas. This onerous responsibility also covers provisions, maintenance, rehabilitation, and upgrade of infrastructure that enhance distribution and ultimate usage of power light in the area. Such infrastructures includes: Transformers, Meters, Cables, Poles-wire, Transformer Oils, and Fittings etc.

Considering the economic situation of the country, and the possibility of customer participation in the electricity power sector such as procurement and maintenance of transformers, Pole wires, cables and etc, NERC by its 2015 Regulation on Investment in Electricity Network, provides for the procedure for participation of Customers who are interested in investing in the Nigerian Electricity Supply Industry (NESI). This regulation specifically requires the execution of a project agreement between the Discos on one hand, and the investing customers on the other hand. The said projects agreement must be approved and sanctioned by NERC, being the main regulatory agency. The high point of the agreement is the requirement for funding/refunding or repayment of the Projects  investment particularly of the customers. Afortiori, the formalities of the agreement are contain as follows:

i. The customer indicates expression of interest to invest in the network by letter to the Disco (i.e Jos Distribution Co. – JED). For instance, for the provision of Transformer, Pole wires, cable or its repairs in their franchise area – the benefiting Customers Community.

ii. The Disco and the investing customer(s) sit and negotiate the terms i.e how the project will be funded by the investing customer either through contributions by community members or other means, mode of refunding/repayment by the Discos either in form of cash refund or metre credit refund value by crediting the metre account of every householder within the franchise community, tenure of funding, refunding/repayment, and finally transfer of ownership of the infrastructure to the Disco – all to be provided therein.

iii. Theeeafter, the terms agreed upon by the parties be reduced into a project agreement to be submitted to NERC for approval. It is to be noted that NERC has only 30 days based on the regulations, to either give its approval or reject same as the case may be; and

iv. Upon approval by NERC, parties (i.e the Community or individual customer) execute the Project agreement in line with the terms and conditions stated therein.

Based on the above formalities, any prospecting customer Community who wishes to ensure stability of light in their community and securing their investment should do so by formalizing a project agreement with the Discos within their franchise area in line with the above formats. This will obviate the situation where a community or individual unnecessarily and undeservedly donate infrastructures such as Transformers, Pole wires, and cables that are lacking in their area, and yet still be charged with Bills for the light to be consumed for the period in question.

In another case whenever any consumer of electricity supplied by the Authority leaves the premises where such electricity has been supplied to him without paying the charges for electricity or meter rental due from him, the Authority shall be entitled to recover from the next tenant the arrears left unpaid by the former tenant, unless the incoming tenant has, before consuming electricity, given notice to the Authority requiring the meter to be read or has given notice of the date of commencement of his tenancy where no meter is supplied.

This therefore, applied to a new tenant who moves into a house or apartment in order to enjoy the electricity that will be provided for him without being subjected to arbitrary payments of bills of the electricity accrued for and by the previous tenant or customer.

Lastly, I wish to remind consumers of electricity light on the need to have a good knowledge of NERC Customer Complaints Handling: Standard and Procedures 2006 which clearly provides for the modus operandi of channeling a complaint and handling in respect thereof.


Kala Esq., a research assistant, wrote in from Gombe.


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