NERC Continues Regulatory Clampdown on Illegal Power Trading


Chineme Okafor in Abuja
The Nigerian Electricity Regulatory Commission (NERC) has stepped up its regulatory crackdown of illegal generation and supply of large capacity volume of electricity in Nigeria without approval.

The commission in this regards disclosed its imposition of a heavy fine on a firm – Cummins Power Generation Nigeria Limited (CPGNL), for allegedly violating the terms of its operational license by extending electricity distribution services to a new customer without approval from its.

The NERC which recently fined a third-party electricity distributor in Lagos – PIPP LVI Disco Limited, the sum of N10, 000 for each day that it allegedly supplied electricity illegally to customers that were not within its license terms, disclosed in a new enforcement action that it has imposed similar fine on CPGNL.

It explained it issued off-grid electricity generation licences to CPGNL the Electric Power Sector Reform Act (EPSRA) which imposes obligations on the holder of an electricity generation licence to comply with the terms of issuance of the licence, regulations, codes and other requirements issued by the Commission from time to time.

CPGNL, it added applied for an off-grid electricity generation licence in 2016 to supply power to the Nigerian Carton and Packaging Manufacturing Company Limited (NICAPACO) in lIupeju area of Lagos, but an objection to that application was raised by the Ikeja electricity distribution company (Disco) which has a franchise to distribute electricity within the area.

According to the NERC, in 2018, Ikeja Disco wrote a petition alleging that CPGNL was encroaching o/n its distribution network, and it investigated the allegation to confirm that CPGNL was supplying electricity to NICAPACO contrary to condition 7(1) (b) of the terms and conditions of its licence it issued it.

It further stated that its investigation uncovered that CPGNL had further constructed distribution infrastructure from its plant in the NICAPACO premises to the Fountain of Life Church, lIupeju, Lagos without its approval, and was subsequently issued a Notice of Intention to Commence Enforcement (NICE) in January 2019.

“The NICE states that CPGNL had breached condition 7(1)(b) of the terms and conditions of its off-grid generation license which states that the licensee shall not engage in the distribution or trading of electricity outside the approved distribution area specified in schedule 1 of its license,” said the NERC which added that CPGNL immediately sought to rectify the infraction by filing an application in February 2019 to supply excess electricity from the unapproved facility that was constructed at NICAPACO to Fountain of Life Church.

Stating its resolution on the development, the NERC thus ordered the CPGNL to immediately suspend its supply of electricity to NICAPACO, as well as the decommissioning of the distribution infrastructure from NICAPACO to Fountain of Life Church.
It also stated that CPGNL shall compensate Ikeja Disco for the loss of revenue for the period during which it supplied electricity to NICAPACO contrary to the terms of its off-grid generation license.

“The quantum of compensation to be paid by CPGNL to IE (Ikeja Electric) shall be computed by IE and approved by the Commission. CPGNL is hereby fined the sum of N10, 000 per day in accordance with section 75 EPSRA from the date of commencement of supply of electricity to NICAPACO contrary to the terms and conditions of its off-grid generation license till the date of compliance with this order,” said the NERC.