Oil & Energy

Develop Plan To Improve Performance, NERC Tells Power Firms

Published

7 years ago

May 27, 2019

The Nigerian Electricity Regulatory Commission has highlighted the need for electricity distribution companies to develop plans to improve their performance.
NERC has released guidelines for the preparation of performance improvement plans by Discos.
“In pursuit of the Power Sector Recovery Programme, the commission is implementing a more robust tariff review process aiming at improving the performance of the Nigerian Electricity Supply Industry.” it said in the document.
The regulator said the process would involve a review of the application of the capital expenditure allowances in the Multi-Year Tariff Order model for compliance with performance improvement plans to be prepared by the Discos and approved by the commission.
It said the implementation of the plan would be strictly monitored.
The commission said the tariff review would prioritise expenditure by the Discos and reflect changes in the operational environment that had occurred since the last review.
“It is noteworthy that one of the overarching objectives of the PSRP is the elimination of tariff shortfalls and the enforcement of market obligations,” NERC added.
According to commission, the PIP developed by Discos shall cover the 2020-2024 tariff period but subject to the contractual provisions of the performance agreements executed between the core investors and the Bureau of Public Enterprises in respect of the allowances for capital and operating expenditure in the remaining term of the agreement.
It said: “Upon approval by the commission, the PIP shall form the basis of prioritising and monitoring the capital investment initiatives of the Discos with revenue adjustment for non-implemented projects.
“The approved PIPs will also be the basis for the defining performance standards/key performance indicators for the next five-year tariff period by the commission with emphasis on improvement in energy throughput and delivery by Discos, reduction in aggregate technical/commercial losses and overall improvement in service delivery to customers.”
According to NERC, revenue requirement should cover the investment and operating costs of efficiently providing electricity services to consumers.
It said, “Discos operating in the Nigerian electricity market are to produce PIPs, which will form the basis for revenue requirement projections and also serve as the companies’ service charter with the consumers to which they will be held accountable by the commission. The PIPs should therefore be realistic and well thought out.
“The preparation of the PIP is an opportunity for Discos to set out what they intend to deliver to consumers over the five-year tariff period as well as the associated costs, in line with the MYTO methodology. In addition to its regulatory interface with the commission, the PIP should be a public-facing document for the Discos, which their stakeholders will refer to throughout the five-year tariff period.”
The regulator added, “Beyond being a submission to the commission, Discos are hereby encouraged to develop PIPs that reflect the priorities of the companies and their stakeholders. The quality of the plan, the robustness of the underlining data and how well it is justified will influence the degree of regulatory scrutiny the commission will apply during the review.
“Hence, if a Disco produces a PIP of a high quality following the guidelines, it will reduce the time and resources spent on iterative process of review and improvement and thus significantly reduce cost for both the company and the commission.”

Oil & Energy

NERC, OYSERC Partner To Strengthen Regulation

Published

7 days ago

February 23, 2026

The Tide

THE Nigerian Electricity Regulatory Commission (NERC) has stressed the need for strict adherence to due process in operationalizing state electricity regulatory bodies.

It, however, pledged institutional and technical support to the Oyo State Electricity Regulatory Commission (OYSERC).

The Chairman, NERC, Dr Musiliu Oseni, who made the position known while receiving the OYSERC delegation, emphasised that the establishment and take-off of state commissions must align fully with the law setting them up.

Oseni said that the NERC remains committed to partnering with State Electricity Regulatory Commissions (SERC) to guarantee their institutional stability, operational effectiveness and long-term success.

He insisted that regulatory coordination between federal and state institutions is critical in the evolving electricity market framework, noting that collaboration would help to build strong institutions capable of delivering sustainable outcomes for the sector.

Also speaking, the Acting Chairman, OYSERC and leader of the delegation, Prof. Dahud Kehinde Shangodoyin, said that the visit was aimed at formally introducing the commission’s acting leadership to the NERC and laying the groundwork for a productive working relationship.

Shangodoyin said , the acting members were appointed to provide direction and lay a solid foundation for the commission during its transitional period, pending the appointment of substantive members.

“We are here to formally introduce the acting leadership of OYSERC and to establish a working relationship with NERC as we commence our regulatory responsibilities,” he said.

He acknowledged NERC’s readiness to provide technical and regulatory support, particularly in the area of capacity development, describing the backing as essential for strengthening the commission’s operations at this formative stage.

“We appreciate NERC’s willingness to support us technically and regulatorily, especially in building our capacity during this transition,” he added.

Oil & Energy

NLC Faults FG’s 3trn Dept Payment To GenCos

Published

7 days ago

February 23, 2026

The Tide

The Nigeria Labour Congress and the Association of Power Generation Companies have engaged in a showdown over federal government legacy debt.

NLC president Joe Ajaero has faulted the federal government’s move to give GenCos N3 trillion from the Federation account as repayment for a power sector legacy debt, which amounts to N6.5 trillion.

In a statement on Thursday, Ajaero said the Federal Government proposed the N3 trillion payment and the N6 trillion debt as a heist and grand deception to shortchange the Nigerian people.

“Nigerians cannot and should not continue to pay for darkness,” Ajaero stated.

Meanwhile, the Chief Executive Officer of the Association of Power Generation Companies, APGC, Dr. Joy Ogaji, said Ajaero may be ignorant of the true state of things, insisting that the federal government is indebted to GenCos to the tune of N6.5 trillion.

She feared the longstanding conflict could result in the eventual collapse of the country’s power.

According to her, the federal government’s N501 billion issuance of power sector bonds is inadequate to address its accumulated debt.

Oil & Energy

PENGASSAN Rejects Presidential EO On Oil, Gas Revenue Remittance ……… Seeks PIA Review

Published

7 days ago

February 23, 2026

The Tide

The Natural Gas Senior Staff Association of Nigeria(PENGASSAN) Festus Osifo, has faulted the public explanation surrounding the Federal Government’s recent oil revenue Executive Order(EO).

President of the association, Festus Osifo, argued that claims about a 30 per cent deduction from petroleum sharing contract revenue are misleading.

Recall that President Bola Ahmed Tinubu, last Wednesday, February 18, signed the executive order directing that royalty oil, tax oil, profit oil, profit gas, and other revenues due to the Federation under production sharing, profit sharing, and risk service contracts be paid directly into the Federation Account.

The order also scrapped the 30 per cent Frontier Exploration Fund under the PIA and stopped the 30 per cent management fee on profit oil and profit gas retained by the Nigerian National Petroleum Company Limited.

In his reaction, Osifo, while addressing journalists, in Lagos, Thursday, said the figure being referenced does not represent gross revenue accruing to the Nigerian National Petroleum Company Limited.

He explained that revenues from production sharing contracts are subject to several deductions before arriving at what is classified as profit oil or profit gas.

Osifo also urged President Bola Tinubu to withdraw his recently signed Presidential Executive Order to Safeguard Federation Oil and Gas Revenues and Provide Regulatory Clarity, 2026.

He warned that the directive undermines the Petroleum Industry Act and could create uncertainty in the oil and gas industry, insisting that any amendment to the existing legal framework must pass through the National Assembly.

Osifo argued that an executive order cannot override a law enacted by the National Assembly, describing the move as setting a troubling precedent.

“Yes, that is what should be done from the beginning. You can review the laws of a land. There is no law that is perfect,” he said.

He added that the President should constitute a team to review the PIA, identify its strengths and weaknesses, and forward proposed amendments to lawmakers.

“When you get revenue from PSC, you have to make some deductibles. You deduct royalties. You deduct tax. You also deduct the cost of cost recovery. Once you have done that, you will now have what we call profit oil or profit gas. Then that is where you now deduct the 30 per cent,” he stated..

According to him, when the deductions are properly accounted for, the 30 per cent being referenced translates to about two per cent of total revenue from the production sharing contracts.

“In effect, that deduction is about two per cent of the revenue of the PLCs,” he added, maintaining that the explanation presented in the public domain did not accurately reflect the structure of the deductions.

Osifo warned that removing the affected portion of the revenue could have operational implications for NNPC Ltd, noting that the funds are used to meet salary obligations and other internal expenses.

“That two per cent is what NNPC uses to pay salaries and meet some of its obligations.The one you are also removing from the midstream and downstream, it is part of what they use in meeting their internal obligations. So as you are removing this, how are they going to pay salaries?” he queried.

Beyond the immediate impact on the company’s workforce, he cautioned that regulatory uncertainty could affect investor confidence in the sector.

“If the international community and investors lose confidence in Nigeria, it has a way of affecting investment. That should be the direction. You don’t put a cow before the horse,” he added.

According to him, stakeholders, including labour unions and industry operators, should be given the opportunity to make inputs at the National Assembly as part of the amendment process saying “That is how laws are refined,”