The Nigerian Electricity Regulatory Commission has transferred the regulatory oversight of the electricity market in Oyo to the Oyo State Electricity Regulatory Commission, in compliance with the Electricity Act 2023.
This was outlined in Order No: NERC/2024/110 issued by the commission on Tuesday.
The order, signed by the NERC Chairman, Sanusi Garba, will take effect from 6 August 2024.
According to NERC, the Government of Oyo State has initiated the implementation of the recent constitutional amendments and the Electricity Act provisions. The state has complied with the necessary conditions and is keen to assume regulatory oversight of the intrastate electricity market in Oyo State.
The state government had duly notified the commission and requested the transfer of regulatory oversight in accordance with the provisions of the Electricity Act.
“Section 230(3) of the Act mandates the Commission to develop a transition plan and timeline for the transfer of regulatory oversight of the intrastate electricity market from NERC to OSERC upon receipt of a formal notification,” said NERC.
The order aims to commence the process of transferring regulatory oversight of the intrastate electricity market in Oyo State from NERC to OSERC, provide a transition plan, and address any transitional matters arising from this transfer.
Consequently, NERC directed the Ibadan Electricity Distribution PLC to incorporate a subsidiary (“IBEDC SubCo”) under the Companies and Allied Matters Act to manage the intrastate supply and distribution of electricity in Oyo State.
IBEDC must complete the incorporation of IBEDC SubCo within 60 days from the effective date of the order. IBEDC SubCo will then apply for and obtain a licence for intrastate supply and distribution from OSERC.
The order reads in part: “IBEDC shall identify the actual geographic boundaries of Oyo State and delineate its network in Oyo State as a standalone network, installing boundary meters at all border points where the network crosses from Oyo State into another state.
“IBEDC shall create an Asset Register of all its power infrastructure located within Oyo State, evaluate and apportion contractual obligations and liabilities attributable to IBEDC’s operations in Oyo State, identify all applicable trading points for energy offtake for IBEDC SubCo’s operations in Oyo State, confirm the number of employees required to provide service in Oyo State as a standalone public utility and transfer the identified assets, contractual obligations, liabilities, and employees to IBEDC SubCo.
“The commission shall prepare a register of licensees, permit holders, certificate holders, and holders of any other authorisations from the Commission in Oyo State. This register will be delineated by authorised activities and the use of the national grid. A notification of the transfer of regulatory oversight will be issued to the companies in the register whose activities are limited to Oyo State, informing them of the transfer of oversight to OSERC. All cross-border transactions involving the national grid will require commission approval.”
Additionally, IBEDC must inform the commission of the contractual details for the supply of energy and capacity that will supply IBEDC SubCo in Oyo State, and where reliance will be made on the national grid or other interstate sources of generation; IBEDC SubCo must seek appropriate authorisation from NERC.
“OSERC will have the exclusive responsibility for determining and adopting an end-user tariff methodology applicable within its regulatory area. Where IBEDC SubCo receives electricity from grid-connected plants, the contracts and tariffs for generation and transmission services will be approved by the commission. The final end-user tariffs approved by OSERC will be the exclusive tariffs applicable in Oyo State, and all tariff policy support for end-use customers in Oyo State will be the responsibility of the Oyo State Government.
“All transfers envisaged by this order must be completed by 5 February 2025,” the order mandates.
It was reports that Enugu, Ekiti, Ondo, and Imo States have previously been permitted to regulate their electricity markets concerning power generation, transmission, and distribution.
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