In exercise of the powers conferred upon it by Section 68(3) of the Electric Power Sector Reform Act 2005 and all other powers enabling it in that behalf, the Nigerian Electricity Regulatory Commission (NERC) developed the NERC Regulation for the Procurement of Generation Capacity, 2014, which came into effect on February 11, 2014. The Regulation provides for the processes to be used by a Buyer in procuring additional electric generation capacity.
The Regulation prohibits, unless otherwise approved by the Commission for good cause, the unsolicited bids or proposals for the provision of generation capacity outside the application of the Regulation and entry into any contract involving the purchase of electrical output of any generation facility to which the Regulation apply.
In its 8th Formal Regulatory Meeting of 17th June, 2015, and in response to the exigency of the period, the Commission suspended the application of the Regulation pending the fulfilment of mandatory conditions by relevant stakeholders for its proper implementation.
Upon review of the reports, NERC resolved at its meeting of 26th May, 2016, that the suspended Bulk Procurement Regulations be lifted in its entirety from the 1st of July, 2016 in order to comply with Section 68(3) of the EPSR Act which provides: “All contracts for purchase of electrical power and ancillary services by the holder of such temporary licence shall be awarded according to an open, transparent, and competitive manner, pursuant to a procedure established by the Commission, unless the circumstances require otherwise and the Commission allows or requires an alternative method.”
It was further resolved that:
1. The Nigerian Bulk Electricity Trading (NBET) Plc. shall with effect from the 1st of July, 2016, cease to negotiate Power Purchase Agreements with unsolicited electric power project developers.
2. All other energy projects currently being negotiated with NBET outside the 400MW approved for exclusive bid among the renewable energy projects in advance stage of negotiation shall be subject to competitive procurement and shall be prequalified for the subsequent rounds of competitive bidding to be conducted by NBET pursuant to the Regulations.
3. NBET’s competitive procurement of electricity from all sources shall be subject to the capacity limits to be determined based on the adequacy report study produced by TCN.
For full details of the NERC Regulation for the Procurement of Generation Capacity, 2014, and additional information on “Good Cause” please visit our website: www.nercng.org.
Dr. Anthony Akah, mni
The Acting Chairman/CEO
The Nigerian Electricity Regulatory Commission
Plot 1099, First Avenue, Off Shehu Shagari Way
Central Business District
P.M.B. 136, Garki
Federal Capital Territory