The Bureau of Public Enterprises (BPE) has rejected moves by electricity distribution companies (DisCos) to declare force majeure over the policy of “eligible customers” and “eligible customer regulations” by the Nigerian Electricity Regulatory Commission (NERC).
Under the policy, big consumers of electricity — those who use nothing less than 2MW per month — are now allowed to buy directly from generating companies (GenCos) and bypass the DisCos.
While the GenCos are happy with the development — it will allow them to sell “stranded” capacity and also address the issue of unpaid power supply — DisCos are of the opinion that it will harm their business.
The DisCos are allowed to declare force majeure if the conditions of sale change adversely — and the government will be forced to “buy back” the privatised entities.
With the declaration of “eligible customers”, the DisCos have decided to declare a force majeure but Alex Okoh, the BPE director-general, said there is no basis for it.
In a press statement issued, Chukwuma Nwoko, head of communications, said Okoh has challenged the assertion by the DisCos that there has been a change in law which prevents them from fulfilling their obligations under the the performance agreement the core investors signed with the BPE.
Okoh has written to the DisCos to reject the notice to declare force majeure, pointing out that under the electric power sector reform act 2005, the minister of power is empowered to issue the policy directive specifying the class or classes of end-use customers that shall constitute eligible customers.
NERC is also empowered to issue eligible customer regulations.
“As you are aware, this is the same Act which midwifed the process whereby the power assets were privatized to the core investors. Given that the Declaration and the Regulations were lawfully and validly issued by the Minister and NERC, and that there has been no change in the law giving rise to a political force majeure event, we are unable to see the basis for the issuance of the notice,” Okoh wrote in the letter, according to Nwoko.