NERC transfers regulatory oversight of electricity market in Ekiti, Ondo

The Nigerian Electricity Regulatory Commission (NERC) has directed the transfer of regulatory oversight of the electricity markets in Ekiti and Ondo states from NERC to the Ekiti State Electricity Regulatory Bureau (EERB) and the Ondo State Electricity Regulatory Bureau (OSERB), respectively.

The move is in compliance with the amended constitution of the Federal Republic of Nigeria and the Electricity Act (EA) 2023.

Recall that the Commission had earlier on Monday directed the transfer of regulatory oversight of the electricity market in Enugu from the Commission to the Enugu State Electricity Regulatory Commission (EERC) in an order marked NERC/2024/039.

The directive, contained in a statement by the NERC chairman, Sanusi Garba and commissioner in charge of Legal, Licencing and Compliance, Dafe Akpeneye, said “all transfers between the Benin Electricity Distribution Companies(BEDC) , Ibadan Electricity Distribution Company (IBEDC), and EERB and OSERB, envisaged by this order shall be completed by 22 October 2024.”

The directive, according to NERC, shall take effect from 1 May 2024 in accordance with the Electricity Act 2023.

The nation’s electricity market was previously centralised. But the presidential assent to the amendment of relevant portions of the Nigerian Constitution in March last year granted legislative autonomy to federating states by empowering the sub-national governments to legislate on the generation, transmission and distribution of electricity within respective states.

According to the order, the three states have initiated the implementation of the provisions of the recent amendment to the CFRN and the EA.

“Hence the act mandates the Commission to develop a transition plan and timeline for the transfer of regulatory oversight of the intrastate electricity market from NERC to EERC, EERB and OSERB upon receipt of a formal notification from the states,” the order stated.

NERC further explained that Ekiti and Ondo states have both complied with the conditions precedent in the laws, duly notified NERC and requested for the transfer of regulatory oversight of the intrastate electricity market in the states.

The commission noted that the transfer order has directed Benin Electricity Distribution Company (BEDC) and Ibadan Electricity Distribution Company Plc (IBEDC) to incorporate subsidiaries BEDC SubCo and IBEDC SubCo to assume responsibilities for intrastate supply and distribution of electricity in Ekiti and Ondo states from BEDC and IBEDC.

“A transfer of regulatory oversight notification shall be issued by the Commission to the companies in the register whose activities are limited within Ekiti and Ondo States, informing the entities of the transfer/assumption of regulatory oversight for their activities by EERB and OSERB. All cross-border transactions involving the national grid shall be subject to the approval of the Commission in accordance with the CFRN and ΕΑ.

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“EERB and OSERB shall have the exclusive responsibility of determining and adopting an end-user tariff methodology applicable within its area of regulatory oversight. Where the SubCos receive 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 the Bureaus shall be the exclusive tariffs that apply in Ekiti and Ondo States and all tariff policy support for end-use customers in the states shall be the responsibility of the Ekiti and Ondo State governments,” the order stated.

However, the commission stated that it retains the role as central regulator with regulatory oversight on the inter-state/international generation, transmission, supply, trading and system operations based on the provision of the EA 2023.