Enugu Electricity Distribution Company Plc has been directed to incorporate a subsidiary (EEDC SubCo) within 60 days.
Why?
The Nigerian Electricity Regulatory Commission (NERC), on Monday, transferred its regulatory oversight of the electricity market in Enugu and Ekiti states to the governments of both states.
It disclosed this in separate orders issued by the commission, stating that the regulatory oversight of NERC in Enugu State has been transferred to the Enugu State Electricity Regulatory Commission.
Also, the commission’s regulatory oversight in Ekiti State has been transferred to the Ekiti State Electricity Regulatory Bureau.
It said, “In compliance with the amended Constitution of the Federal Republic of Nigeria and the Electricity Act 2023 (Amended), the Nigerian Electricity Regulatory Commission has issued an order to transfer regulatory oversight of the electricity market in Enugu State from the commission to the Enugu State Electricity Regulatory Commission.
“With the EA (Electricity Act), the commission retains the role as central regulator with regulatory oversight on the inter-state/international generation, transmission, supply, trading and system operations.
“The EA also mandates any state that intends to establish and regulate intra-state electricity markets to deliver a formal notification of its processes and requests to NERC to transfer regulatory authority over electricity operations in the state to the state regulator.”
NERC stated that based on this, the Government of Enugu State complied with the conditions precedent in the laws, and duly notified the commission and requested for the transfer of regulatory oversight of the intra-state electricity market in Enugu State.
NERC in the order directed the Enugu Electricity Distribution Company Plc to incorporate a subsidiary (EEDC SubCo) to assume responsibilities for intra-state supply and distribution of electricity in Enugu State from EEDC.
“EEDC shall complete the incorporation of EEDC SubCo within 60 days from April 22, 2024 and the sub-company shall apply for and obtain a licence for the intra-state supply and distribution of electricity from EERC, among other directives.
“All transfers envisaged by this order shall be completed by October 22, 2024,” the commission stated, adding that the order takes effect from May 1, 2024.
Also in the second order on the matter, the commission declared that it had transferred the regulatory oversight of the electricity market in Ekiti State from NERC to the Ekiti State Electricity Regulatory Bureau in compliance with the Electricity Act 2023 (Amended).
It said, “This regulatory instrument may be cited as the Order of Transfer of Regulatory Oversight of the Electricity Market in Ekiti State from Nigerian Electricity Regulatory Commission to the Ekiti State Electricity Regulatory Bureau. This order shall take effect from May 1, 2024.”
The commission exercises regulatory oversight of the Nigerian Electricity Supply Industry as the apex sectoral regulator in accordance with powers conferred by the Electricity Act 2023.
The electricity market in Nigeria was previously centralised and the move to decentralisation was achieved when presidential assent was granted to the amendment of relevant portions of the Constitution of the Federal Republic of Nigeria on March 17, 2023.
Paragraph 14{b) Part ll of the Second Schedule to the 1999 Constitution provides that “a House of Assembly may make laws for the State with respect to generation, transmission, and distribution of electricity to areas not covered by a national grid system within that State.”
But this was amended to “a House of Assembly may make laws for the State with respect to generation, transmission, and distribution of electricity to areas within that State.”
This amendment granted legislative autonomy to federating states in the Federal Republic of Nigeria by empowering the sub-national governments to legislate on the generation, transmission and distribution of electricity within each respective state.
Section 2(2) of the EA, takes due legislative cognizance of the powers conferred on the federating states with the amendment to Paragraph 14{b) Part Il of the Second Schedule to the 1999 Constitution.
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