FG Transfers Regulatory Oversight of Enugu Electricity Market
FG Transfers Regulatory Oversight of Enugu Electricity Market: Following
the Enugu State Electricity Law signed by Governor Peter Mbah and the recent
constitution of the Enugu State Electricity Regulatory Commission, ESERC,
by the Mbah Administration, the Nigerian Electricity Regulatory Commission
(NERC) has, in a historic move, formerly transferred the regulatory oversight
of the Enugu State electricity market to the state agency effective May 1, 2024.
This is a landmark development in the nation’s power sector, being the first
time NERC would be ceding such regulatory authority to any state electricity regulatory agency.
FG Transfers Regulatory Oversight of Enugu Electricity Market: the licensing
The transfer was made known by NERC on Monday in an April 22, 2024 Order No. NERC/2024/039 signed by the Commission’s Chairman, Sanusi Garba, and the Commissioner for Legal, Licensing, and Compliance, Dafe Akpeneye.
The transfer is sequel to the amendments of the Paragraph 14 (b) of the
Second Schedule to the 1999 Constitution by the 9th National Assembly in
2023 as well as the Electricity Electricity Act 2023, both of which effectively
devolved power generation, transmission, and distribution from the Exclusive
List to the Concurrent List and also empowered the states to manage and regulate
their electricity markets within their jurisdictions.
It is recalled that the Mbah Administration initiated the Enugu State Electricity Bill 2023, which the governor signed into Law in September the same year and also set the pace in March 2024 constituted the Enugu State Electricity Regulatory Commission (ESERC) led by Chijioke Okonkwo as the Chairman/CEO.
the law
The Electricity Act 2023 provides that within 45 days of receiving formal notification
of the enactment of the law under subsection (1), the Commission (NERC)
shall draw and deliver to the State Regulator a draft order setting out a plan and
timeline for the transition of regulatory responsibilities from the Commission
to the State Regulator, which transition shall be completed not later than
6 months from the date on which the formal notification in subsection (1) was delivered to the Commission.
Explaining further, NERC said the ESERC now holds the exclusive power to
set and adopt end-user electricity tariffs within Enugu State, tailoring these
charges to local conditions and requirements.
Also, while ESERC manages local tariff methodologies, any electricity
sourced from grid-connected plants and the related tariffs for generation
and transmission services must still receive approval from the Nigerian Electricity Regulatory Commission (NERC), ensuring alignment with national energy policies.
the consumers
Furthermore, the final tariffs approved by ESERC for consumers in Enugu
State will be definitive for the state, with the Enugu State Government
responsible for supporting and implementing tariff-related policies,
ensuring that electricity pricing is both fair and attuned to the specific needs of the state’s residents.
Consequently, NERC ordered that: “Enugu Electricity Distribution Company
PLC, 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 Enugu 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 EERC.
“EEDC shall identify the actual geographic boundaries of Enugu State and carve out its network in Enugu State as a standalone network with the installation of boundary meters at all border points where the network crosses from Enugu State into another state.
the infrastructure
“EEDC shall create an Asset Register of all its power infrastructure located within Enugu State.
“Evaluate and apportion contractual obligations and liabilities attributable to EEDC’s operations of its subsidiary in Enugu State.
“Identify all the applicable trading points for energy o take for the operations of EEDC SubCo in Enugu State
“Confirm the number of employees that are required to provide service to Enugu State as a standalone public utility; and transfer the identified assets for operations in Enugu State, contractual obligations, liabilities and employees to EEDC Subco.”