NBET challenges NERC’s authority to combine trading with regulation

Nigerian Bulk Electricity Trading Plc (NBET)

Nigerian Bulk Electricity Trading Plc (NBET) has raised a fundamental question over whether the Nigerian Electricity Regulatory Commission (NERC) can provide Power Purchase Agreement (PPA), negotiate with investors and still issue them licence.

A Senior Counsel of NBET, Demvihin Tsumba, raised the issue during the public consultations of the commission’s draft regulations on feed in tariff, smart metering and capping on estimated billing at Abuja.

She asked: “Why would the commission want to draft a PPA when the commission does not have trading” power.

The NBET counsel urged the commission to explain how it would regulate the transaction that it (NERC) negotiated and handed over to the parties.

“But at the bottom line for NBET,  we feel that there are some fundamental considerations that the commission needs to look at concerning this regulation because it appears that the commission is going into trade in power instead of regulating,” she said.

She described the draft regulation as a departure from the norms of the electricity market for proposing to either assume the position of an off-taker or dictate what the NBET should do.

Tsumba maintained that it was confusing for NERC to aim at introducing the regulation having recently suspended the Bulk Competitive Procurement Regulation.

The commission had in its draft FEED-in -Tariff Regulations renewable energy sourced electricity in Nigeria, proposed that “Bulk Trader to purchase 50% of renewable energy electricity capacity, leaving the remaining 50% for the distribution licensees.”

According to NERC in the draft regulation, the programme cap for the Re-Feed-in Tariff (REFIT) programme is 2000Mega Watts (MW).

It noted that this is the maximum installed renewable energy project capacity is based on the draft National Energy Master Plan which envisaged that by the end of the decade, 10% of the national energy supply shall be from renewable.

The commission said that the 10 % ceiling was based on the current transmission capacity, stressing that the proposed capacity limits are 10MW from win, 30MW from small hydro, 10MW from biomass (including municipal waste and 5MW from solar photovoltaic.

By Pita Ochai

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