The Nigerian Electricity Supply Industry (NESI) continues to evolve as the Federal Government pursues policies aimed at liberalization, competition, and improved access to electricity. One of the significant reforms under the Electric Power Sector Reform Act (EPSRA) 2005 is the creation of the ‘Eligible Customer’ framework, which allows certain categories of customers to purchase electricity directly from generation companies (GenCos), bypassing distribution companies (DisCos).
At Strichland Firm, we recently provided comprehensive legal advisory to a client seeking to obtain ‘Eligible Customer’ status from the Nigerian Electricity Regulatory Commission (NERC). Our work spanned the entire process, from substation development and regulatory compliance to ensuring adherence with power purchase guidelines for third-party arrangements.
Our Advisory Scope
1. Regulatory Compliance: We guided the client through the applicable regulatory framework, including NERC’s Eligible Customer Regulations, licensing requirements, and operational obligations.
2. Substation Development: We reviewed and advised on the legal and contractual frameworks for the development of a dedicated substation, ensuring compliance with technical standards and statutory approvals.
3. Power Purchase Guidelines: Our team structured and negotiated the terms of the Power Purchase Agreements (PPAs) and Transmission Use of System (TUoS) agreements, safeguarding the client’s commercial interests while ensuring compliance with NERC’s guidelines.
4. Third-Party Arrangements: We advised on legal considerations for wheeling electricity through the national transmission grid and facilitated documentation for third-party involvement in power delivery.
Impact for the Client
Through our advisory, the client was able to:
- Successfully obtain ‘Eligible Customer’ status from NERC.
- Secure a robust legal framework for its electricity sourcing and distribution arrangements.
- Mitigate regulatory and operational risks in its substation project.
- Position itself for long-term cost efficiency and reliable power supply.
Why This Matters
The Eligible Customer framework is a game-changer for industries and large power consumers in Nigeria, enabling them to access more reliable and competitively priced electricity. However, the process of obtaining approval requires careful navigation of regulatory, contractual, and technical issues.
Our experience in this matter underscores Strichland Firm’s capability in Energy, Oil & Gas law, particularly in advising clients on regulatory approvals, infrastructure development, and energy transactions in Nigeria.
