NERC moves against non-performing power generation plants

NELMCO concludes audit of PHCN debt

The Nigerian Electricity Regulatory Commission (NERC) has commenced the process of withdrawing operational licences of electricity generation firms which have failed to perform.

Meanwhile, the Nigerian Electricity Liability Management Ltd (NELMCO) has concluded verification of liabilities of the defunct Power Holding Company of Nigeria (PHCN), preparatory to offsetting them.

Yesterday, NERC released a list of 27 firms whose licences may be withdrawn. This followed completion of an audit of the licences it has issued so far. The audit report, according to NERC, indicates that the affected firms could not meet the terms and conditions for their licences.

Most of the affected firms may be sanctioned for failure to meet their milestones or commission their power plants within three years of being licensed. But the firms have 30 days to provide reasons their operational licences should not be revoked.

A notice of intent to this effect, which was released by NERC yesterday, indicates that the affected firms will be required to make representation to the commission against the proposed withdrawal of licence, and the representations shall be taken into cognizance by NERC in reaching a final decision on their respective matters.

Contained in the notice is a list of 63 generation and distribution companies rated as category one. They are in operation and have no issue with the commission. Forty other firms in categories one to four will, however, have to justify continued ownership of their licences or get them withdrawn within the next 30 days to 12 months.

In category two are firms that have allegedly ceased operations. These are CET Power Projects being promoted by West African Portland Cement Company, Ewekoro, Ogun State; and Contour Global Solutions of Nigeria being promoted by Bottling Company of Apapa, Lagos State. The commission, according to its notice, is to immediately “start the process of cancellation of these licences in line with Clause 17 of the Electric Power Sector Reform Act of 2005” which lists five conditions for cancellation of licence.

Thirteen other power generation firms in category three are “not in operations but have substantially satisfied their milestones.”