Transcript STAKEHOLDERS CONSULTATION ON THE MAJOR REVIEW

NERC LICENSING AND
REGULATORY FRAMEWORK
Dr. Steven Andzenge, MON
Commissioner
Legal, Licensing & Enforcement, NERC
Abuja, 29th November, 2011
OUTLINE
• The licensing and regulatory philosophy
• Requirement for licensing and the procedure
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The procedure
The format
The fees
The duration, extension & renewal
• The licensing status of the Successor Companies
• Salient terms and conditions
• Conclusion
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The licensing and regulatory philosophy
• Sector 32(1)(f) EPSRA requires NERC to ensure regulation
is fair and balanced for licensees, consumers, investors,
and other stakeholders
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Statutory Requirement for Licensing
– Section 62 makes it mandatory to licence except captive
and less than 1MW
– NERC is empowered to make regulations on application
for licenses
– The procedure is stipulated in Nigerian Electricity Regulatory Commission
Application for Licenses (Generation, Transmission, System Operations,
Distribution & Trading) Regulations, 2010.
– This entails formal application in a prescribed format and payment of
application fee
– Requirement are corporate/legal requirements, technical and commercial
requirements
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Statutory Requirement for Licensing
(Cont)
- The law gives 6 month within which an
application must be granted or refused
- Application is evaluated within the 3 divisions
in NERC
- License is issued upon fulfillment of conditions
and upon payment of all necessary license
fees.
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The PHCN Successor Companies
• PHCN was unbundled by Section 8 of the EPSR Act
• By Section 23(1) were granted interim licenses on
July 1, 2006 after which they were granted full
licenses on January 1, 2010 upon payment of license
fees
• License is for 10 years duration can be extended and
renewed giving total of 25 years.
• NERC has issued letters of comfort in respect of the
privatization exercise.
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Terms and Conditions
- Terms and Conditions include:
- Payment of operation fees:
- Generation- 1.5% of Tariff Charge/kWh
- Distribution- 1.5 of licensee’s charges/kWh net the cost of generation
and transmission
- Transmission- 1.5% of Tariff Charge/kWh
- Compliance with reporting obligations requirements as contained
in the Nigerian Electricity Regulatory Commission Reporting
Compliance Regulations 2009
- Supplementary activities must be with NERC’s approval. This is to
ensure that supplementary activities do not materially
compromise the financial integrity of the licensee
- Assignment/transfer of licensed business must be with the
consent of the Commission.
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Terms and Conditions
- Disposal of relevant assets must be with the consent of
the Commission.
- Change in control must be with prior approval of the
Commission.
- 30 days notice required for changes in ownership exceeding 5%
- Any increase in issued share capital
- Enforcement
- Commission has powers to enforce and impose
sanctions
- Power to suspend and revoke licenses
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Discos
• Required to:
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Comply with Distribution Code
Comply with Commission’s tariff and charges
Develop and maintain a distribution system
Customer metering
Promote efficient energy use through sensitization of
consumer.
• Have a dedicated compliance/regulatory department
committed to compliance issues.
• Maintain good regulatory standing.
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Transmission
• Obligation to offer connection to all
• Compliance with transmission standards
• Ensure operations are in a accordance with
the Act and conditions of the Commission’s
licenses.
• Comply with Codes and Rules
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Other Regulatory Steps of the
Commission
Regulation are being developed in the following areas:
– Independent Electricity Distribution Network;
– Acquisition of land and access right for power projects in
Nigeria; and
– Independent Electricity Transmission Network.
– Embedded Generation
• Development of an enforcement frame work.
• Development of dispute resolution mechanism for operators
and consumers.
• Details of all regulations by the Commission on our website
www.nercng.org
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Conclusion
• The Licensing Philosophy requires NERC to
ensure regulation is fair and balanced for
licensees, consumers, investors, and other
stakeholders.
• The Commission is committed to a well
regulated NESI
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THANK YOU
Dr. Steven Andzenge, MON
Commissioner, Legal, Licensing and
Enforcement
Nigerian Electricity Regulatory Commission
E-mail: [email protected]
Website: www.nercng.org
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