The Nigerian Electricity Regulatory Commission (NERC) has transferred regulatory oversight of the electricity market in Oyo State to the Oyo State Electricity Regulatory Commission (OSERC), following the Electricity Act 2023. This change was formalized in Order No: NERC/2024/110, issued on Tuesday and set to take effect on August 6, 2024.
NERC Chairman Sanusi Garba signed the order, which follows Oyo State’s implementation of recent constitutional amendments and the provisions of the Electricity Act. The state government has met the required conditions and requested the transfer of oversight for the intrastate electricity market.
NERC stated that Section 230(3) of the Act requires the Commission to create a transition plan and timeline for transferring oversight from NERC to OSERC after receiving formal notification. The order is intended to initiate this transfer process, establish a transition plan, and address any issues that arise during the transition.
Additionally, NERC has directed the Ibadan Electricity Distribution PLC (IBEDC) to establish a subsidiary, “IBEDC SubCo,” under the Companies and Allied Matters Act to handle the intrastate supply and distribution of electricity in Oyo State. IBEDC is required to complete the incorporation of IBEDC SubCo within 60 days of the order’s effective date and subsequently apply for and obtain a license for intrastate operations 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 authorized 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 authorization 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 reported that Enugu, Ekiti, Ondo, and Imo States have previously been permitted to regulate their electricity markets concerning power generation, transmission, and distribution.
