Tag: NERC

The Nigerian Electricity Regulatory Commission (NERC) on Monday, May 6, ordered the 11 electricity Distribution Companies (DisCos) to reduce Band “A” customers tariff from N225/kWh to N206.8/kWh for the month of May 2024.

The commission made this disclosure in its press release titled: “NERC Issue May 2024 Tariff Order to Electricity Distribution Companies.”

The statement that the management signed said: “Pursuant to the tariff methodology adopted by the Nigerian Electricity Regulatory Commission, a revised tariff order covering the month of May 2024 has been issued by the Commission to the eleven (11) electricity distribution companies.”

NERC explained that it has reviewed changes in the macroeconomic parameters over the preceding month of April 2024, especially the appreciation of exchange rates that culminated in the reduction of the B and A customers’ tariff from N225/kWh to N206.8kWh.

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The management noted: “The Commission has considered changes in the macroeconomic parameters over the preceding month of April 2024 and especially the appreciation of exchange rates – consequently the Commission has approved a downward review of end-user tariffs for Band “A” customers from NGN225/kWh to NGN206.8/kWh.”

NERC reaffirmed its commitment to providing a balanced and effective regulatory regime serving the needs of the Nigerian Electricity Supply Industry.

Following the order, Ikeja Electricity Distribution Company; Kaduna Electricity Distribution Company; and Abuja Electricity Distribution Company yesterday announced the downward adjustment to their customers in the affected band feeders.

Recalled that NERC had on April 3, 2024, approved the new tariff for the DisCos in its 2024 Supplementary Multi-Year Tariff Order (MYTO).

It was predicated on different variables as the price of gas rose from $2.18 to $2.43 per MMBTU.

NERC also based the hike on the prevailing exchange rate and other macroeconomic factors.

However, there was an uproar over the adjustments from different quarters, especially as the DisCos could not meet the minimum of 20 to 24 hours of electricity supply.

Initially, there were complaints that Abuja Electricity Distribution Company (AEDC) extended the new rate to other customers that were not in Band A.

Consequently, the commission fined the energy distributor N200 million and also compelled it to refund the excess charge to the affected customers within some days.

Efforts for a better efficiency in the electric sector received a boost yesterday as the Nigerian Electricity Regulatory Commission (NERC) announced the unbundling of the Transmission Company of Nigeria (TCN) with the establishment of the Nigerian Independent System Operator of Nigeria Limited (NISO).

The TCN is responsible for the transmission of electricity generation by the Generating Companies (Gencos) to the national grid and subsequently to the Distribution Companies (Discos) to electricity end users.

NERC, in a circular, disclosed that TCN would transfer all market and system operation functions to the newly formed NISO. This move comes in line with the provisions of the Electricity Act 2023, which provides clearer guidelines for the incorporation and licensing of the independent system operator (ISO).

Previously, TCN held Transmission Service Provider (TSP) and System Operations (SO) licenses issued by NERC.

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However, with the establishment of NISO, TCN will now transfer its assets and liabilities related to market and system operations to the new entity.

According to the circular, the Bureau of Public Enterprises (BPE) has been directed to incorporate a private company limited by shares under the Companies and Allied Matters Act (CAMA) by May 31.

This new company, to be named the Nigerian Independent System Operator of Nigeria Limited (NISO), will assume the market and system operation functions as specified in the Electricity Act and the terms of TCN’s system operation license.

NERC outlined NISO’s responsibilities, including managing assets and liabilities related to market and system operation on behalf of market participants and consumer groups.

The new ISO will also negotiate contracts for ancillary services with independent power producers and generation licensees, in addition to performing market and system operation functions for the benefit of market participants and system users.

The Nigerian Electricity Regulatory Commission (NERC) has issued an order to establish the Independent System Operator (ISO) for the Nigerian Electricity Supply Industry (NESI).

It signified the unbundling of the Transmission Company of Nigeria (TCN) that has hitherto been composed of the ISO and the Transmission Service Provider (TSP).

But TCN, according to the order, shall now retain only the responsibility of the TSP.

The Order No: NERC/2024/45, which the chairman, Engr. Sanusi Garba and Vice Chairman, Dr. Musliu Oseni signed took effect from 1st May, 2024. 

NERC said: “Before the Nigerian Electricity Regulatory Commission Order on the Establishment of the Independent System Operator for the Nigerian Electricity Supply Industry.

“This regulatory instrument may be cited as the Order on the Establishment of

the Independent System Operator.

Commencement

“This Order shall take effect From 1 May 2024 and shall remain in force until

amended or revoked by a subsequent Order issued by the Nigerian Electricity

Regulatory Commission (“NERC” or the “Commission”).”

The order recalled that the Transmission Company of Nigeria Plc (“TCN”) as a successor company was issued two separate licences to operate as the transmission service provider and system operator for the national grid system by the Commission.

NERC said the  repealed Electric Power Sector Reform Act 2005 (“EPSRA” or the

“Repealed Act”) envisaged that TCN would transfer the function of system

operation for the national grid to an Independent System Operator (“ISO”).

The commission added that the  Electricity Act (the “EA” or “Act”) 2023 came into effect on 9 June 2023 and this piece of legislation went beyond the Repealed Act by “providing

clearer guidelines for the incorporation, governance structure and licensing

of the ISO, as well as the transfer of the assets and liabilities of the system

operations portion of TCN to the ISO.

“Section 15 of the EA provides as follows on the incorporation and licensing

of the ISO.

“The Transmission Company of Nigeria Plc (hereinafter referred to as “TCN”), being the successor company issued the license that covers Transmission Service Provider, market and system operation functions under the repealed Act shall in accordance with the terms of its license and within such stage or period of the market as the Commission may in a written directive specify, take such steps as are necessary under the Companies and Allied Matters Act, 2020 to incorporate an entity, the Independent System Operator which may be a company limited by shares or have such ownership and governance structure as the Commission may specify and the entity once incorporated pursuant to

the provisions of this section shall immediately apply to the Commission and be licensed by the Commission as an Independent System Operator to carry out such market and system operation

functions as stipulated under this Act its license and such terms and conditions as the Commission may direct.”

NERC also noted that upon the upon incorporation and issuance of an ISO license by the Commission, pursuant to subsection (1) of this section (i) the TCN shall transfer to the Independent System Operator (hereinafter called “the “ISO” in this Act), all the assets and liabilities held by the Transmission Company of Nigeria Plc pertaining to its market and system operation functions and the Independent System Operator shall be subject to such powers and duties of an independent System Operator under the terms of its license and the provisions of this Act in relation to marketand system operation.

The commission, however noted that the TCN shall retain its Transmission Service Provider license and shall be responsible for transmission assets and liabilities and perform such functions as are relevant to the development and maintenance of the power transmission infrastructure in accordance with the terms of its license as may be issued by the Commission and the provisions of this Act.

NERC also said the Commission shall, through an order put in place a clear plan

and timeline for the transition process in subsections (1) and (2)of this section above to avoid disruption of industry operations.

The Commission noted that “Section 16(1) of the EA provides—At the time of incorporation, the subscribers to the Incorporation Documents of the ISO shall be as may be directed by the Commission in consultation with relevant stakeholders in order to achieve the objective of the creation of the ISO, the Commission held several stakeholder consultations and public hearings on the determination of the following.

The Nigerian Electricity Regulatory Commission (NERC) has issued an order to deregulate prices for meters under the Meter Asset Provider (MAP) Scheme effective on May 1, 2024, following requests for further price reviews due to foreign exchange and inflation rate changes.

NERC established that the capacity of meter providers to supply meters at the authorised, regulated cost had been limited due to the notable fluctuations in these macroeconomic indicators.

NERC said: “The commission has noted the need for the efficient pricing of meters to respond more quickly to changes in macroeconomic parameters, particularly exchange rates.

“The commission has further taken cognisance of the constraints/challenges faced by MAPs and LMMAs and therefore approved the deregulation of prices of meters deployed under the MAP scheme with effect from May 1, 2024.

It emphasised that all meter costs under the MAP programme would be set via a competitive bidding procedure starting on the specified date, giving customers a choice of approved vendors.

“The cost of prices of meters deployed under the MAP scheme is hereby deregulated to enable end-use customers acquire meters from MAPs of their choice based on competitive open market prices determined from transparent bidding frameworks,” the commission stated.

Read Also: NERC okays N81,975, N143,836 for meters

“All MAP permit holders are henceforth eligible to provide services and transact for the provision of meters and metering services with any Disco in the Federal Republic of Nigeria with their existing permit.

“The lifting of the restriction on permitting to operate in all Discos is subject to the mandatory requirement for MAPs to comply with the associated Disco specific requirements/specifications.”

In addition, NERC directed all Discos to ensure the effective and seamless integration of smart meters deployed by MAPs with the Disco’s head-end systems and meter data management systems.

The House of Representatives on Tuesday ordered the Nigerian Electricity Regulatory Commission (NERC) to suspend the operation of the recently announced tariff increase.

The House also called for the suspension of other conditions in the newly issues review of the Multi-Year Tariff Order.

It set up a special committee made up of the Committees on Power, Commerce, Delegated Legislation and National Planning to organize a well-structured hearing on the price regulation of Nigerian Electricity Supply Industry (NESI).

The hearing would be with the participation of the Minister of Power, Chairman and Commissioners of NERC, the chief executives of all electricity utilities in Nigeria, Presidents of the Nigeria Labour Congress and the Trade Union Congress (TUC), as well leaders of chambers of commerce Nigeria. 

The House resolved to appoint a well-regarded former regulator as technical consultant to develop templates for determination of the “legality, reasonableness of the procedure adopted by NERC in approving the tariff increase and establishing the performance benchmarks for the Disco’s.”

It also resolved to authorize the consultant to work with the special committee to draft a bill to provide for administrative procedures that that entrench proper consultation and legislative review of process for tariff setting in the electricity and other public services in Nigeria.

These resolutions followed the adoption of a motion of urgent importance moved by Hon Nkemkanma Kama.

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Kama said the legislative motion on increase in electricity tariff seeks to address key issues surrounding the sudden hike in electricity prices in Nigeria. 

He said: “It highlights concerns over due process, fairness, and the impact on consumers. The motion aims to restore public trust, protect consumer rights, and ensure regulatory accountability in the Nigerian Electricity Supply Industry (NESI).

“The facts presented include the alarming tariff increase announced by the Nigerian Electricity Regulatory Commission (NERC) on April 1, 2023, resulting in a staggering 300% rise for certain consumers. 

“However, what’s more concerning are the reports indicating discrepancies in customer categorisation and widespread complaints regarding inadequate service despite increased charges. 

“This situation has not just sparked national anxiety, but it also threatens regulatory certainty and investor confidence in the sector, demanding immediate attention.”

He said the motion argues for legislative intervention, underlining the constitutional and moral obligations to address the crisis and alleviate the burden on Nigerian citizens.

“It places a strong emphasis on the legislative oversight role over NERC and the electricity utilities, stressing the need for fair and just pricing and consultation with stakeholders in tariff determination processes. This is not just a responsibility, but a duty we owe to our constituents.

“Key issues highlighted include the failure of due process in approving the tariff increase, concerns over discriminatory practices, and the disputed nature of government subsidies to electricity distribution companies (DISCOs). 

“The motion proposes resolutions to suspend the recent tariff increases, establish a special committee for hearings involving relevant stakeholders, appoint a technical consultant to assess the legality and reasonableness of NERC’s procedures, and draft a bill to improve regulatory processes in tariff setting.

“Overall, this motion underscores the importance of legislative action to address the challenges facing the electricity sector and ensure fair treatment of consumers while promoting transparency and accountability in regulatory decision-making.”

The Nigerian Electricity Regulatory Commission (NERC) yesterday increased the price of a single phase meter from N58,661.69 to N81,975.16.

Also, it increased the price of the three phase meter from N109,684.36 to N143,836.10.

The adjustments are contained in a directive by the commission’s chairman,  Sanusi Garba, and Commissioner Legal and Licensing Compliance,  Dafe Akpeneye.

It was titled: “The  deregulation of meter prices for meters deployed under the Meter Asset Provider Scheme.”

NRRC said the Meter Asset Provider and National Mass Metering Regulations would account for the metering of end-use customers of successor electricity distribution licensees (“DisCos”).

Section 8(1 )(c) of the regulations provides that “the cost of single phase and three phase meters for MAPs, inclusive of all other associated costs of installation and warranties, shall continue to be at the regulated rates approved by the commission”.

Read Also: NERC announces new prices for single, three phase meters

The agency said the Meter Asset Providers (MAPs) and Local Meter Manufacturers Associations (LMMAs) have requested for a further review of meter prices in

consideration of significant changes in NGN/USD foreign exchange and inflation rates since the last price review in September 2023.

It pointed out that significant changes in these macroeconomic variables have constrained their ability to supply meters at the approved regulated price.

NERC said it has considered the need for the efficient pricing of meters to respond more quickly to changes in macroeconomic parameters, particularly exchange rates.

The Nigerian Electricity Regulatory Commission (NERC) has adjusted the price of a single phase meter from N58,661.69 to N81,975.16.

It also adjusted the price of three phase meter from N109,684.36 to N143,836.10.

The adjustments were contained in the  ORDER NO: NERC/2024/040 that the commission’s Chairman, Engr. Sanusi Garba and Commissioner Legal and Licensing Compliance, Barrister Dafe Akpeneye issued on Monday

.

The title of the order is “The  deregulation of meter prices for meters deployed under the Meter Asset Provider Scheme.”

The Chairman and Commissioner said the Meter Asset Provider and National Mass Metering Regulations (the

“Regulations”) provide for the metering of end-use customers of successor

electricity distribution licensees (“DisCos”). Section 8(1 )(c) of the Regulations provides that “the cost of single phase and three phase meters for MAPs, inclusive of all other associated costs of installation and warranties shall

continue to be at the regulated rates approved by the Commission”.

NERC said the Meter Asset Providers (

(MAPs) and Local Meter Manufacturers Associations (LMMAs) have requested a further review of meter prices in

consideration of significant changes in NGN/USD foreign exchange rate and

inflation rate since the last price review in September 2023 and the

significant changes in these macroeconomic variables has constrained their ability to supply meters at the approved regulated price.

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Garba and Akpeneye said the  commission has noted the need for the efficient pricing of meters to respond more quickly to changes in macroeconomic parameters, particularly

exchange rates. 

According to them: “The Commission has further taken cognisance of the

constraints/challenges faced by MAPs and LMMAs and therefore approved

the deregulation of prices of meters deployed under the MAP scheme with

effect from 1 May 2024.”

NERC said, “the commission hereby orders: with effect from 1 May 2024, all prices of meters under the MAP scheme

shall be determined through a competitive bidding process with customers provided with a choice of authorised vendors.

“The combined effects of sections 8(1 )(c), 8(1 )(d), 16(1 )(h), 31 and 32(1 )(b)

of the Regulations on the regulated pricing of meters deployed under the

MAP scheme is hereby derogated.

“The cost of prices of meters deployed under the MAP scheme is HEREBY

DEREGULATED to enable end.use customers acquire meters from MAPs.”

NERC noted that the choice is based on competitive open market prices determined from transparent bidding frameworks.

The order noted that all MAP permits holders are henceforth eligible to provide services and transact for the provision of meters and metering services with any DisCo in the Federal Republic of Nigeria with their existing permit. 

According to the commission, the lifting of the restriction on permitting to operate in all DisCos is subject to the mandatory requirement for MAPs to comply with the associated DisCo specific requirements/specifications.

The commission added that all DisCos shall ensure the effective and seamless integration of smart meters

deployed by MAPs with the DisCo’s head-end systems and meter data

management systems.

It further noted that all DisCos shall provide a publicly accessible online portal on their website where prospective MAPs can view the DisCo’s technical specifications and

commercial terms for participation as a MAP within its network area.

Garba and Akpeneye said all  DisCos are required to conduct a thorough test and confirmation of specifications for new meters proposed by a prospective MAP and concluded no later than 20 working days from the date the proposed MAP fulfils all the requirements specified on the online portal to participate within its network area.