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Published On: Fri, Apr 25th, 2014

NERC approves Interim Rules for Transitional Electricity Market

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By Etuka Sunday

The Nigerian Electricity Regulatory Commission (NERC) has approved and signed into law the rules for the Interim period between completion of privatisation and the start of the Transitional Electricity Market (TEM).

A statement by the Head, Public Affairs,Dr Usman Abba Arabi, the order was signed by the Chairman and Chief Executive of the Commission, Dr. Sam Amadi

The Interim Rules are intended to cover all electricity taken from the transmission system by the distribution companies with adjustment made to account for any bilateral arrangements between generation companies (Gencos) and distribution companies (Discos).

The objectives of the rules are to establish a framework to govern trading arrangements during the Interim period when Power Purchase Agreements (PPAs) between the privatised Power Holding Company of Nigeria (PHCN) successor generation companies and Nigerian Bulk Electricity Trading Plc(NBET) and Vesting Contracts between NBET and the privatised PHCN successor distribution companies will not be effective.

It is also to manage the probable revenue shortfall in the industry by determining the revenue allowable to participants and service providers during the interim period.

The objectives also include the establishment of payment arrangements and flow of funds from Discos through the market operator to all beneficiaries and to establish the sources of funds required to ameliorate the probable shortfall in the revenues collected by the Discos during the interim period.

The market operator shall ensure the Discos with invoices for their allocation of energy delivered and available capacity regulatory charges and services provided in each month during the interim period.

In the event of disputes arising during the period between participants and service providers, it shall be resolved in accordance with the disputes resolution provision of the market rules.

Also in this same vein, the Commission has under the powers conferred upon it by section 96 of the EPSR Act 2005 approved the Enforcement Regulation for the Nigerian Electricity Supply Industry.

 

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