The Nigerian Electricity Regulatory Commission (NERC) said it will not authorise construction of the 3,050 megawatts (MW) Mambilla and 700MW Zungeru hydro power stations if the government fails to obtain appropriate operational licences for both plants obtained from it (NERC) in line with provisions of the Electric Power Sector Reform (EPSR) Act 2005.
The regulatory agency has therefore cautioned against plans by the government to commence construction of the two hydro power plants without operational licenses, noting that the action would amount to contravening extant laws guiding operations in the Nigerian Electricity Supply Industry (NESI).
The EPSR Act, which became operational in 2005, provides the legal framework for reform of the Nigerian power sector in accordance with policies ensconced in the National Electric Power Policy (NEPP).
The Act also removes operational and regulatory responsibilities of the electricity industry from the federal government and provides the legal backing for NERC to periodically determine tariffs, operational licenses and other related matters as a regulator in the sector.
Chairman of NERC, Dr. Sam Amadi, who spoke on the issue, stated that the commission had made it clear to the Ministry of Power that failure to apply and obtain licence before construction of construction of the hydro power plants would amount to contravening the EPSR Act.
“We have told the permanent secretary in the ministry of power that Zungeru and Mambilla have to apply for licensee, otherwise, they are contravening the Act because the Act says you have to apply for license. Even their commercial and technical plans have to be approved by NERC before construction”, Amadi said.
Amadi declared that unless the regulatory commission granted operational licenses for the construction of the two power plants that were expected to add about 3,750MW of electricity to the national grid, they will not operate as legal entities in the NESI when completed.
He also spoke on regularising the operations of the National Integrated Power Projects (NIPPs) plants, noting that the license was given to the Niger Delta Power Holding Company (NDPHC), which managers the NIPP projects on behalf of the companies.
“There are seven companies but one person owns the companies. That’s why it’s called the holding company. But the licence goes to each plant and each plant must be an incorporated company, each of them becomes individual and independent companies and should have their separate boards.
But, going forward because the NDPHC did not apply for licence before they constructed, it was constructed illegally if you like, because its government owned. We were not there then, so, by the time we came on board we wrote to them that they must regularise themselves and get license, they applied, and we reviewed the application and approved their licences according to the law,” Amadi added.
Information from ThisDay was used in this report.