NERC Extends Tenure for Electricity Licences to 25 Years


    The Nigerian Electricity Regulatory Commission (NERC) has revealed its intention to extend by additional 15 years, operational licences granted to companies that operate in the Nigeria’s Electricity Supply Industry (NESI).

    This came as the federal government at the weekend disclosed that its target was to have 24 hours nationwide coverage of electricity as against the 12 to 16 hours currently being enjoyed by some Nigerians.

    NERC said at the weekend in Abuja that the new provision had become necessary as it sought to mitigate the various operational risks associated with licences with short lifespan such as what it had granted to existing operators in the country’s power sector.

    To this end, the commission explained that it would now guarantee a 25-year maximum tenure for licences it issues to companies engaged in electricity businesses in the country, after which further renewal of the licences could be granted upon due consideration.

    The Chairman of NERC, Dr. Sam Amadi, had hinted of the proposed licence extension when he spoke at the recent signing of a number of power industry transaction agreements between the federal government and operators in the industry following government’s reform of the sector and the privatisation of successor companies of the Power Holding Company of Nigeria (PHCN).

    Amadi had made this disclosure while reiterating the tenacity of the commission to protect extant rights of domestic and industrial electricity end users and preferred bidders of PHCN companies in the country as the privatisation exercise comes to conclusion.

    “As a regulatory agency with quasi-judicial powers granted it by the enabling law, NERC has the power to interpret the provisions of the Act establishing it. We have adopted this interpretation to mitigate the risks short licence tenures create and also to provide financiers and other contracting entities the comfort they require to accommodate the long-term gestation of most electricity industry projects,” Amadi said, while explaining the commission’s decision.

    He further said: “Let me once again state clearly, the resolve of NERC as a regulator in the power sector to protect the rights of electricity consumers in a new electricity market that will be defined by transparency and accountability across board.”

    It is understood that the licence extension measure would not just guarantee comfort to investors to accommodate long-term gestation of projects in the industry, but would equally minimise legal need of having to renew licences every 10 years as it were.
    The Electric Power Sector Reform (EPSR) Act 2005, upon which the NERC derives its existence and powers, provides for initial licence tenure of ten years, with the possibility of five-year extension when NERC determines that it is in the interest of the public to do so.
    Meanwhile, the Transmission Company of Nigeria (TCN) has disclosed its completion of a new 2X30/40MVA, 132/33kV transmission substation at Tamburawa in Kano State.

    TCN said in a statement signed by its Assistant General Manager, Public Affairs, Mr. Dave Ifabiyi, that the new Tamburawa transmission substation situated in the outskirts of Kano metropolis was constructed by Nespak Nigeria Limited, with the supervision of its engineers.
    Ifabiyi noted that the substation was connected to the Zaria-Kano 132KV single circuit transmission line, adding that the installation and inauguration meant that the transformer capacity within the Kano axis has increased by additional 80MVA.

    According to him, the Challawa industrial area and the Tamburawa water works in the state stand to benefit maximally from the new transmission substation as soon as the Kano Electricity Distribution Company completes the ongoing construction works on the two 33kV feeder lines from the new substation to both areas.

    TCN also revealed that within the last four weeks, it had successfully completed the in-house installation and inauguration of a 60MVA, 45MVA and 30MVA, 132/33kV power transformers in Ibadan, Oyo State; Suleja in Niger State and Akure in Ondo State respectively.

    Also, a 150MVA, 330/132/33kV power transformer provided by the World Bank, through the PHCN’s Project Monitoring Unit (PMU) was successfully installed in collaboration with TCN within the same period in Ibadan.

    Meanwhile, the Permanent Secretary in the Ministry of Power, Godknows Igali, disclosed that the country would surpass the 10,000 mega watts of electricity supply before the end of the year with the Independent Power Projects (IPP) kicking off on schedule.

    Igali, who disclosed these to journalists in Abuja, explained that government had invested considerably in the power sector and expressed optimism that if unscrupulous Nigerians stopped vandalism of electricity installations, the issue of stable, uninterrupted electricity supply would be a thing of the past.

    According to the Permanent Secretary, 2013 is a year of consolidation on the investment made over the years in the sector, insisting that with a combined generation capacity of the privatised National Independent Power Projects (NIPP) and IPP projects, Nigerians will join the league of global players in the power sector and that over $600 million had so far been paid by the companies that purchased the generation companies. He said: “At the moment, we have over 4,000 mega watts going out and it has been increasing.  We can only grow better from this level.  We are looking closely to 10,000 mega watts before the end of the year; by the time all the NIPP comes on stream, towards the end of this year.

    “By the time all of them come on stream, we shall have well over 9,000 and heading to 10,000 megawatts. “We were looking at when power availability was eight hours or even less than that.  Now, we have been able to cross over to eight hours to 12 hours or even more than that.  We now have over 16 hours of power supply.”