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).
The order, signed by the Chairman of the Commission, Dr. Sam Amadi, provides for regulation applicable to energy produced and delivered as well as associated services during the interim period.
The singing of the rules is in line with the powers conferred on the Commission by section 96 of the Electric Power Sector Reform Act(EPSR, 2005).
The rules cover all electricity taken from the transmission system by the distribution companies (Discos) with adjustment made to account for any bilateral arrangements between generation companies (Gencos) and Discos.
A statement issued by the Head of Public Affairs of the Commission, Dr, Abba Arabi, said the existing arrangements shall be maintained save to the extent that they were modified by the order of the Commission.
“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 PHCN successor Gencos and Nigerian Bulk Electricity Trading Plc(NBET) and Vesting Contracts between NBET and the privatised PHCN successor Discos 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,” it said.
It further said the rules would lead to the establishment of payment arrangements and flow of funds from Discos through the market operator (MO)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.
