The world's oldest and existing power station ; The world's first hydro generation dam ; The world's largest generating unit today ; The world's largest dam ; The world's longest transmission line ; The world's first hydro generation station ; The world's oldest and existing power station ; Advantages of Alternating Current (AC) over Direct Current (DC) ; The world's largest solar power station ; Michael Faraday's contribution to electricity utilization ; James Watt's contribution to power generation
BannerGreen

You and Nigeria Electricity

BannerGreenWhiteGreen

Expert explains

BannerWhiteGreenWhite

You and Nigeria Electricity

BannerGreenWhiteGreen

Expert explains

Codes
Grid Code
Grid Code Glossary
Distribution Code
Metering Code
Nigerian Electricity Health and Safety Code
Market Rules
IPPs
IPP-Intro
Renewable Energy
Renewable Energy-Intro

PART V - ESTABLISHMENT, FUNCTIONS AND POWERS OF THE NIGERIAN ELECTRICITY REGULATORY COMMISSION


Part V of the Electricity Act 2023 comprises sections 33 through 62. The 30 sections deal with various issues relating to the Nigerian Electricity Regulation Commission (NERC). These issues can be categorized into five main areas:

  1. Establishment, functions, and powers of NERC (referred to as the Commission): sections 33 and 34.
  2. Appointment procedures and terms for the Commissioners: sections 35 to 42.
  3. Commissioners' compensation and potential conflicts of interest: sections 43 and 44.
  4. The Commission's decision-making process and business practices: sections 45 to 51.
  5. The Commission's budget and sources of funds: sections 52 to 62.
Highlights of each category are provided below.

1. Highlights of Establishment, Functions, and Powers of NERC): sections 33 and 34.

a) Establishment and Structure:
  • The Nigerian Electricity Regulatory Commission (referred to as "the Commission") is established as a corporate body with the ability to sue or be sued.
  • The headquarters is located in Abuja, with provisions for zonal and state offices for effective function.
b) Role and Independence: The Commission serves as the apex regulator of Nigeria's electricity sector and operates as an independent body.

c) Principal Functions:
  • Market Structure: Promote efficient market structures and optimize resource utilization.
  • Accessibility: Facilitate consumer connections to electricity in both rural and urban areas.
  • Supply and Pricing: Ensure adequate electricity supply and fair pricing that allows operational profitability for licensees.
  • Safety and Quality: Maintain safety, security, and quality in electricity production and delivery.
  • Regulation Fairness: Ensure regulation is balanced for all stakeholders.
  • Reporting: Provide quarterly reports on its activities to the President and National Assembly.
  • Market Development: Issue directives for market development and operation.
  • Renewable Energy: Promote the development of renewable energy and its integration into Nigeria’s energy mix.
  • Tariffs: Encourage cost and service reflective tariffs, aiming to phase out cross-subsidies.
  • Social Inclusion: Promote gender mainstreaming and local content within the sector.


2. Highlights of Appointment Procedures and Terms for the Commissioners: Sections 35 to 42.

a) Composition of the Commission: The Commission consists of seven full-time Commissioners appointed by the President, confirmed by the Senate, reflecting Nigeria’s geo-political zones.

b) Qualifications for Nominees: Candidates must be selected for their qualifications or experience in fields like law, finance, engineering, and electricity-related sectors.

c) Terms of Office: Commissioners generally serve five-year terms, with initial terms structured to ensure continuity.

d) Reappointment and Term Limits: Commissioners can be reappointed for one additional term, and all appointments must be made before the current term expires.

e) Disqualifications for Appointment: Disqualifications include non-citizenship, financial conflicts of interest in the electricity sector, insolvency, mental incapacity, or criminal convictions.

f) Vacancy and Removal Procedures: Procedures are outlined for resignation, forced vacancy due to misconduct, incapacity, or if a Commissioner is convicted of a crime.

g) Chairman and Vice-Chairman Roles: The President appoints the Chairman and Vice-Chairman, who have specific roles and responsibilities, including leadership during absences.

h) Meetings and Decision-Making: The Commission sets its meeting schedules, with decision-making based on the majority of votes and a quorum of four. The Chairman has a casting vote in ties.

i) Operational Flexibility: The Commission may use written resolutions signed by all Commissioners for decision-making, though any Commissioner can request full discussions.

3. Highlights of Commissioners' Compensation and Potential Conflicts of Interest: Sections 43 and 44. a) Remuneration and Allowances:
  • Commissioners are paid remuneration and allowances as determined by the Commission, with guidance from the National Salaries, Incomes and Wages Commission.
  • The determination process considers factors such as the specialized nature of the work, financial self-sufficiency, private sector salary comparisons, and the nature of expenses incurred.
b) Conflict of Interest:
  • Commissioners must disclose any direct or indirect pecuniary interest that could conflict with their duties. This includes interests held by relatives or through ownership in companies.
  • Such commissioners are prohibited from participating in discussions or votes related to the conflict of interest.
c) Declaration and Termination of Other Engagements:Commissioners must declare their assets per the specified legal guidelines and terminate any other gainful engagements before accepting their appointment.

d) Penalty for Non-compliance:Violation of the conflict of interest or declaration provisions is an offense, punishable by a fine up to ₦1,000,000, imprisonment for up to six months, or both.

4. Highlights of the Commission's decision-making process and business practices: sections 45 to 51.

a) Validity of Decisions: Commission decisions are valid even if there are vacancies or defects in its constitution, unless conflicts of interest are not ratified by other Commissioners.

b) Venue and Regulations: The Commission can conduct proceedings anywhere in Nigeria and is responsible for setting its own regulations and procedures.

c) Transparency and Accountability: Decisions and orders must be well-documented, publicly accessible, and reasons must be provided on request if they affect existing rights.

d) Hearing Procedures: The Commission must hold hearings on matters of significant public interest and notify interested parties for representation.

e) Consultation on Technical Matters: The Commission can seek expert advice for technical or professional issues.

f) Legal Questions: Legal questions arising from Commission decisions can be referred to the Federal High Court. g) Review and Appeals: Aggrieved parties can apply for a review of Commission decisions, which must be addressed within 30 days. Further appeal can be made to the Federal High Court, but only after exhausting internal mechanisms.

5. Highlights of the Commission's budget and sources of funds: sections 52 to 62.

a) Budget Preparation and Submission: The Commission must prepare and submit an annual budget as specified by the Minister and may submit a supplementary budget for unforeseen expenditures.

b) Funding Sources:The Commission's funds include fees, charges, allocations from the National Assembly, and other accruals, excluding fines or penalties.

c) Operating Surplus: After auditing, any operating surplus is determined and paid to the Rural Electrification Fund (REF) within 30 days.

d) Financial Year: The financial year runs from January 1 to December 31.

e) Accounting and Reporting:Proper accounts must be maintained, and financial statements submitted to relevant authorities. Quarterly reports are required.

f) Audit Requirements:An auditor examines the Commission's accounts and reports on their accuracy. The Commission must publish audited accounts in newspapers.

g) Auditor's Access:Auditors can demand related records and information necessary for auditing; non-compliance is penalized.

h) Agreements and Contracts:The Commission can authorize individuals to enter into agreements or contracts on its behalf.

i) Reporting to the Minister:The Commission provides additional reports to the Minister as required, which must be released publicly.

j) Employment and Delegation:The Commission employs staff and can delegate functions, except for making final orders.

k) Liability:The Commission and its employees are protected from liability for actions taken in good faith.

Advertisement

Copyright (c) 2025