Chairman-Nigerian-Electricity-Regulatory-Commission-Mr_-Sam-AmadiThe Federal Government has earned about N389.975 million from the issuance of operating licenses to the new owners of the privatised assets of the Power Holding Company of Nigeria, PHCN.

This is apart from the over N400 billion received as proceeds from the sale of the privatised companies.

The money, according to a document obtained by Vanguard, from the Nigerian Electricity Regulatory Commission, NERC, was earned from licensing fees paid by the buyers of the generation, distribution and transmission companies, over the last couple of months.

Analysis of the schedule of fees for the NERC “Licence and Operating Fees Regulation” shows that Government received the following sums from the new licencees:

Generation fees of N23.15 million each:

*Mainstream Energy Solutions Limited Consortium, MESL, – 1,338.4 megawatts Kainji/Jebba Power generating plant

*North-South Power Company, – 600MW Shiroro Power Plc

Transnational corporation

*Taleveras Group – 776MW Afam Generating Company

*Transnational Corporation of Nigeria, Transcorp, – 972MW Ughelli Power plant

*Korean Electric Power Corporation, KEPCO, – Egbin Power Plant, and Sapele Power Plant.

Other licencees paid:

*Amperion, – N19.875 million – 414MW Geregu Power plant

*China National Machinery and Equipment Import and Export Corporation, CMEC and SEPCo-Pacific Energy – N16.6 million each for – 304MW Omotosho, and

*304MW Olorunsogo Power plants respectively.

There are also other fees for other categories of generating companies. These include:

*1 – 10MW – N905, 000;

*11 – 50MW – N5.02 million

*51 – 100MW – N6.7 million.

*101 – 200MW — N9.975 million

*201 – 300MW — 13.325 million

*301 – 400MW — N16.6 million

*401 – 500MW — N19.875 million

*500MW and above — N23.15 million.

Furthermore, for operations not connected to the transmission grid or embedded generation, the NERC requires the generating companies to pay the following:

*1 – 10MW – N1.675 million

*11 – 25MW – N5.825 million

*26 – 40MW – N6.663 million

*41 – and 60MW – N7.538 million

*61 – 85MW — N8.375 million

*86 – 100MW — N9.213 million

*101 – 200MW — N12.45 million

*201 – 400MW — N15.8 million

*401 – 500MW — N24.75 million

*500MW and above  — N32.9 million

Distribution and Transmission fees

The NERC also received a total of N148.5 million or N13.5 million each from the 11 privatised distribution companies. The management of the Transmission Company of Nigeria, TCN, paid a licensing fee of N49.5 million.

The combined licensing fees are:

*Transmission company N49.5 million

*Distribution companies — N13.5 million

*System Operations — N49.5 million

*Trading — N13.5 million

For distribution operations not connected to the grid, companies are to pay a combined licensing fee of N3.35 million.

The fees

The licensing fee is a combination of processing fees for application and amendment of licenses, license fees. Also included are annual operating fees, processing fees for renewal and extension of tenure.

Firms in the generation, transmission, system operations and distribution system with operations connected to the transmission grid are expected to pay an annual operating fee of 1.5 per cent of licensee charges/Kilowatt hour.

While those in distribution and trading are expected to pay annual operating fee in the form of 1.5 per cent of their charges per kilowatt hour net the cost of generation and transmission.

For firms not connected to the transmission grid, annual operating fee is 1.5 per cent of tariff charge per kilowatt hour while distribution companies are to pay 1.5 per cent o f their charges per kilowatt net the cost of generation and transmission as annual operating fees.


Information from Vanguard was used in this report.