NERC Grants Imo Regulatory Autonomy Over Electricity Market

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The Nigerian Electricity Regulatory Commission (NERC) has granted the transfer of regulatory oversight of the Imo state electricity market to the state Electricity Regulatory Commission.

This is contained in an Order signed by Sanusi Garba, the Chairman of NERC, stating that the transfer is in compliance with the Electricity Act 2023 and shall take effect from July 1, 2024.

The electricity Act 2023 granted legislative autonomy to federating states in the Federal Republic of Nigeria by empowering the sub-national governments to legislate on the generation, transmission, and distribution of electricity within each respective state.

With this, only four states — Enugu, Ondo, Ekiti, and Imo — have achieved regulatory autonomy.

According to the Commission, the order seeks to commence the process and provide a transition plan for the transfer of regulatory oversight for the intrastate electricity market in Imo State from the Commission to ISERC.

The order is aimed at addressing ensuing transitional matters arising from the transfer of regulatory oversight for the intrastate electricity market in Imo State from the Commission to ISERC.

NERC statement reads:

“Enugu Electricity Distribution Company (“EEDC”) is hereby directed to incorporate a subsidiary (“EEDC SubCo”) under the Companies and Allied Matters Act for the assumption of responsibilities for intrastate supply and distribution of electricity in Imo State from EEDC.”

“EEDC shall complete the incorporation of EEDC SubCo within 60 days from the effective date of this Order and, EEDC SubCo shall apply for and obtain a licence for the intrastate supply and distribution of electricity from ISERC.”

“EEDC shall identify the actual geographic boundaries of Imo State and carve out its network in Imo State as a standalone network with the installation of boundary meters at all border points where the network crosses from Imo State into another state.”

According to the Commission, EEDC is expected to create an Asset Register of all its power infrastructure located within Imo State; evaluate and apportion contractual obligations and liabilities attributable to EEDC’s operations of its subsidiary in Imo State.

The commission also ordered the EEDC to identify all the applicable trading points for energy offtake for the operations of EEDC SubCo in Imo State.

EEDC shall confirm the number of employees that are required to provide service to Imo State as a standalone public utility; and transfer the identified assets for operations in Imo State, contractual obligations, liabilities, and employees to EEDC SubCo.

“The Commission shall prepare a register of licensees, permit holders, certificate holders, and holders of any other authorisations from the Commission in Imo State.”

The register shall be delineated along the lines of authorised activities and use of the national grid for their activities.

“A transfer of regulatory oversight notification shall be issued by the Commission to the companies in the register whose activities are limited within Imo State informing the entities of the transfer/assumption of regulatory oversight for their activities by ISERC.”

All cross-border transactions involving the national grid shall be subject to the approval of the Commission in accordance with the CFRN and EA.

“ISERC shall confirm to the Commission the contractual details for the supply of energy and capacity that shall supply EEDC SubCo in Imo State, and where reliance shall be made on the national grid or other interstate sources of generation; EEDC SubCo shall seek appropriate authorisation/approval from the Commission in accordance with the CFRN and EA.”

ISERC shall have the exclusive responsibility of determining and adopting an end-user tariff methodology applicable within its area of regulatory oversight.

Where EEDC SubCo receives electricity from grid-connected plants, the contracts and tariffs applicable for generation and transmission services shall be approved by the Commission.

The final end-user tariffs approved by ISERC shall be the exclusive tariffs that apply in Imo State, and all tariff policy support for end-use customers in Imo State shall be the responsibility of the Imo State Government.

“All transfers envisaged by this Order shall be completed by 31 December 2024,” it stated.

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