In alignment with this directive, the Commission has mandated that the Ibadan Electricity Distribution Company, known as IBEDC, must, within a period of 60 days, establish a subsidiary company that will assume control over its franchise operations specifically within Oyo State.
In a recent public disclosure, the Nigerian Electricity Regulatory Commission (NERC) issued an official Order regarding the “Transfer of Regulatory Oversight of the Electricity Market in Oyo State.” This announcement was made yesterday, and the decision was taken as a result of a formal application submitted by the government of Oyo State.
The Electricity Act of 2023 provides the necessary legal framework that grants individual states the authority to establish their own electricity markets as well as to implement regulations governing the supply and distribution of electrical power within their geographical confines. This empowers states to tailor their energy service delivery to meet the unique needs of their local populations.
NERC, in the order that was signed by its Chairman, Engr. Sanusi Garba, along with the Commissioner for Legal Affairs, Licensing, and Compliance, Dafe Akpeneye, indicated that the newly formed Oyo State Electricity Regulatory Commission (OSERC) will take on the critical responsibility of devising and establishing appropriate tariffs for electricity consumers located throughout the state.
In the detailed statement provided by NERC, it was specified: “IBEDC shall proceed to identify the precise geographic boundaries that define Oyo State and subsequently delineate its electrical network within these borders, thereby creating a standalone network. This process will be accompanied by the installation of boundary meters positioned at all locations where the network extends from Oyo State into neighboring states.”
Furthermore, “IBEDC is required to compile an Asset Register that includes all power infrastructure that is situated within the confines of Oyo State. They must also assess and distribute the various contractual obligations and liabilities that stem from IBEDC’s operations involving its subsidiary within Oyo State.”
Additionally, “It is necessary for IBEDC to pinpoint all relevant trading points for energy off-take related to the operational activities of IBEDC SubCo within Oyo State. The company should also determine the requisite number of employees necessary to maintain service as a standalone public utility in Oyo State and facilitate the transfer of the identified assets, contractual obligations, liabilities, and personnel to IBEDC SubCo.”
Further stipulations elaborate that “The Commission shall undertake the preparation of a comprehensive register that includes all licensees, permit holders, certificate holders, and any entities bearing other forms of authorization from the Commission within the jurisdiction of Oyo State. This registry will be organized along the lines of the authorized activities and the utilization of the national grid for their respective operations.”
“A formal notification regarding the transfer of regulatory oversight will be disseminated by the Commission to all companies listed in the register. This notification will inform them that their activities, which are confined within the geographical limits of Oyo State, are now under the regulatory jurisdiction of OSERC.”
In regards to operational authority, “Any and all cross-border transactions that involve the national grid must receive approval from the Commission, which is mandated to adhere to the protocols established by the Electricity Act and the relevant regulations. IBEDC must confirm and report to the Commission every contractual detail concerning the provision of energy and capacity intended for the operational needs of IBEDC SubCo in Oyo State, particularly where such provisions rely on the national grid or other interstate sources of electricity generation. In situations where IBEDC SubCo requires energy resources from these sources, it must solicit the necessary authorizations or approvals from the Commission, consistent with the regulations prescribed by the Electricity Act and other applicable laws.”
Moreover, “OSERC shall be given exclusive authority to determine and implement a user-end tariff methodology that will be applicable within its designated regulatory region. In instances where IBEDC SubCo receives electricity from grid-connected production facilities, it is mandated that the contracts, as well as the tariffs associated with the generation and transmission services, receive prior endorsement and approval from the Commission.”
“Ultimately, the end-user tariffs that are sanctioned by OSERC will serve as the definitive tariffs that apply across Oyo State. Furthermore, the overall responsibility for supporting tariff policies that benefit end-users throughout Oyo State will rest solely with the government of Oyo State.”
Lastly, the Commission emphasized that all transfers outlined in this order are expected to be finalized and completed by the date of February 5, 2025, ensuring that the regulatory framework is firmly established and implemented in due time.
