The Nigerian Electricity Regulatory Commission (NERC) has ordered Nigerian Bulk Electricity Trading Plc (NBET) to stop entering into new contracts for the purchase and resale of electricity and ancillary services in the Nigerian Electricity Supply Industry (NESI).
The order came into effect on July 25, NERC said on Sunday in a circular jointly signed by the commission's chairman, Sanusi Garba, and its commissioner for Legal Affairs, Licensing and Enforcement, Dafe Akpeneye.
The order, according to the commission, will remain in effect until modified or revoked by a subsequent order issued by the commission.
In the order, NERC said electricity distribution companies (DisCos) can now purchase electricity directly from generation companies (GenCos) without NBET acting as an intermediary.
“NBET will immediately stop entering into new contracts for the purchase and resale of electricity and ancillary services at NESI.
“Any contract executed by NBET in violation of this order will not be approved by the commission and will be treated as a violation subject to regulatory sanction,” the commission said.
NERC explained that NBET will, in the meantime, continue to manage the fully-performing contracts with five generation companies including Azura Power West Africa Ltd, Omotosho Power Plc, Olorunsogo Power Plc, Nigerian Agip Oil Company Ltd and Shell Petroleum Development Company of Nigeria Ltd, based on the minimum “take or pay” capacities contained in their respective Power Purchase Agreements (PPAs).
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He noted that the capacity of the five plants will be awarded to the DisCos based on the guaranteed proportion of capacity contained in their respective award contracts.
“All other power plants with take-and-pay PPAs or interim power sales agreements with NBET are hereby granted 60 days from the commencement date of this order to negotiate and contract with DisCos on a bilateral basis for the capacity they currently have with NBET (“Contracted Capacity”),” it said.
PREMIUM TIMES reported last week that President Bola Tinubu's administration may be contemplating dissolving NBET following the expiration of its current operating licence.
Energy Minister Adebayo Adelabu had earlier declined to renew the mandate of the company's current managing director and CEO, Nnaemeka Ewelukwa.
Mr Ewelukwa succeeded Marilyn Amobi, whose tenure was plagued by numerous controversial events and multiple allegations of corruption which she denied.
In a circular dated 23 July, seen by this publication, Mr Adelabu informed Mr Ewelukwa that his four-year term would not be extended. The notification was made in response to Mr Ewelukwa’s letter notifying the Minister of the impending expiry of his term and the possible consideration of a second term.
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For a smooth and seamless transition, the Minister directed Mr. Eweluka to hand over charge to the company’s most senior general manager by July 24.
NBET was incorporated on July 29, 2010 and is wholly owned by the federal government under the Electric Power Sector Act of 2005. NBET acts as the primary purchaser of electricity from generating companies.
The company purchases energy through a Power Purchase Agreement (PPA), which sets out the terms and conditions for transactions between these generating companies and NBET.
Within the energy sector, it acts as “manager and administrator of the electricity pool”.
Following the expiration of the company's initial 10-year license in November 2021, NERC extended its operating license for a further three years.
The license will expire in November.