A NEW dispensation is under way in the power sector as the Federal Government yesterday opened the coast for private operators to generate and distribute electricity to un-served Nigerians.
For a hitch-free implementation of the new deal, two regulations were unveiled by the government, which addressed areas that may impede the participation of the private sector in the scheme.
Such firms are free to generate or distribute 5,000 kilowatts of electricity or even below.
This came barely a week after the National Privatisation Council (NCP) granted state governments the right to own 49 per cent equities in 11 succession firms of the Power Holding Company of Nigeria (PHCN).
One of the new regulations, which was made public by the Nigerian Electricity Regulatory Commission (NERC) yesterday, empowers small firms to generate electricity while the other authorises independent distribution firms to supply power to un-serviced communities.
This arrangement also allows the firms to provide electricity for their clients without linking up to the national grid.
But before they begin operations, such companies will undertake in writing that the facility of the existing distribution licensee will not be used in their operations.
They will also ensure that there shall not be any parallel overhead lines to existing facility as well as ensure the safety of equipment, workers and the public.
The NERC also specified that they must have a minimum distribution capacity of the Independent Electricity Distribution Network Operator (IEDNO) of 5,000kw and also show the ability to provide generation capacity for the IEDN.
While the embedded generation regulations deal with direct production of power from small independent power plants, the Independent Electricity Distributions Networks Regulation (IEDNR) relates to the operation of isolated off-grid independent electricity distribution network in rural or urban areas, which are not connected to a distribution network.
Such networks will therefore be operated by system operators to be licensed by NERC.
The regulation applies to all independent electricity distribution systems, their owners, operators, and users of the distribution systems.
It was learnt that the move is designed to meet the electricity need of over 60 per cent of Nigerians, who have no access to power or connected to the national grid. Those connected to the grid are plagued by frequent outages.
The first regulation is the Nigerian Electricity Regulatory Commission for Embedded Generation 2012 while the second is the Nigerian Electricity Regulatory Commission for Independent Electricity Distribution Networks.
The embedded generation rule empowers companies to use diverse energy sources to generate small 10 megawatts and other small plants in rural and urban areas not served by the national grid and distribute direct to communities around them.
Chairman of NERC, Sam Amadi, said feed-in-tariffs approved by the commission shall be applied for energy embedded generators, and shall be fixed for specified period, subject to periodic reviews and approval by the agency. Metering of customers and embedded generators, he said, shall be mandatory.
A copy of the regulations, which The Guardian obtained yesterday, read in part: “The commission may issue a licence to construct, own, operate and maintain, or to procure the construction, operation and maintenance of an independent electricity distribution system provided that a licence shall not be issued unless the commission is satisfied that there is no existing distribution system within the geographical area to be served by the proposed independent distribution system; where the infrastructure of an existing distribution licensee is unable to meet the demand of customers in the area, the IEDN operator shall satisfy laid-down conditions before the issue of a licence.
