NERC bars NBET from entering into new electricity contracts

The Nigerian Electricity Regulatory Commission (NERC) has directed the Nigerian Bulk Electricity Trading Plc (NBET) to cease entering into new contracts for the purchase and resale of electricity and ancillary services in the Nigerian Electricity Supply Industry (NESI).

The order took effect from 25 July, NERC said on Sunday in a circular jointly signed by the commission’s Chairman, Sanusi Garba, and its Commissioner, Legal, Licencing and Compliance, Dafe Akpeneye.

The order, according to the commission, shall remain in force until amended or revoked by a subsequent order issued by the commission.

In the order, NERC said that electricity distribution companies (DisCos) can now purchase electricity directly from generation companies (GenCos) without NBET acting as an intermediary.

“NBET shall forthwith cease to enter into new contracts for the purchase and resale of electricity and ancillary services in NESI.

“Any contract executed by NBET in violation of this order shall not be approved by the commission and shall be treated as an infraction that is subject to regulatory sanction,” the commission said.

NERC explained that NBET shall, in the interim, continue to administer the fully effective contracts with five generation companies that include 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).

It noted that the capacity from the five plants shall be vested to DisCos based on the guaranteed share of capacity contained in their respective vesting contracts.

“All other power plants with “take and pay” PPAs or interim energy 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 agreement basis the capacity currently with NBET (“Contracted Capacity”),” it said.

PREMIUM TIMES had last week reported that the administration of President Bola Tinubu may be contemplating the dissolution of NBET following the expiry of its current operating licence.

The Minister of Power, Adebayo Adelabu, had earlier declined to renew the tenure of the current Managing Director/CEO of the company, Nnaemeka Ewelukwa.

Mr Ewelukwa succeeded Marilyn Amobi, whose tenure was riddled by numerous controversial developments and multiple corruption allegations that she denied.

In a circular dated 23 July, seen by this publication, Mr Adelabu informed Mr Ewelukwa that his four-year tenure would not be extended. The notice was given in response to Mr Ewelukwa’s letter notifying the minister about the imminent expiration of his tenure and possible consideration for a second term.

For a smooth and seamless transition, the minister directed Mr Eweluka to hand over to the most senior general manager in the company by 24 July.

NBET was incorporated on 29 July 2010 and fully owned by the federal government in accordance with the Electric Power Sector Act, 2005, NBET acts as the principal purchaser of electricity from generating companies.

The company acquires power through a Power Purchase Agreement (PPA), which sets out the terms and conditions for transactions between these generating companies and NBET.

Within the power industry, it serves as the “manager and administrator of the electricity pool.”

Following the expiration of the company’s initial 10-year licence in November 2021, NERC extended its operating licence for an additional three years.

The licence is set to expire in November.