Following the completion of an audit exercise on its licences, the Nigerian Electricity Regulatory Commission has issued 27 power generation companies a 30 days’ notice to provide justification on why their licences should not be revoked.
The notice for cancellation of licences posted on the commission’s website on July 28, 2015, was sequel to the discovery through an audit exercise that the affected firms could not meet the terms and conditions for their licenses.
Classifying the power firms into categories, NERC said that two companies whose licences were being cancelled had ceased to operate, while the 24 others whose licenses might be withdrawn had yet to commence operation and had not satisfied their milestones/not submitted quarterly reports to it.
The commission categorised 63 power generation as category one and would remain in operation as they have no issue with the commission.
Forty other firms in categories one to four will also need to justify their continued ownership of their licences or get it withdrawn within the next 30 days to 12 months.
In category two are those licensees that have ceased operations. The firms include CET Power Projects being promoted by West African Portland Cement Company, Ewekoro, Ogun State and Contour Global Solutions owned by Nigeria Bottling Company of Apapa, Lagos State.
The commission in its notice said it will immediately “start the process of cancellation of these licences in line with Clause 17 of the Electric Power Sector Reform Act of 2005” which listed five conditions for cancellation of licences.
Thirteen other power generation firms in category three that are “not in operations but have substantially satisfied their milestones” include Ethiope Energy; Supertek Nigeria; Mabon Energy; Bresson AS; Hudson Power; Knox J & L; Tower Power, Abeokuta; Zuma Energy Nigeria transferred to Itobe Coal 1, 2, 3 and 4 firms.
Others in this category are MBH Power; Delta Electric Power; Wedotebary Nigeria; Century Power Generation and Supertek Electric.
Those in this category will “be required to satisfy their outstanding milestones and start construction within the next 12 months, after which the commission will commence the process for withdrawal of their licences in line with Clause 18 of the NERC Application for Licences (Generation, Transmission, System Operations, Distribution and Trading) Regulations, 2009.”
In the fourth category are five power generation firms that “are not in operations and have not substantially satisfied their milestones.” They have 30 days to convince the commission on why the withdrawal of their licences should not be effected. In this category are ICS Power; Anita Energy; Ibafo Power Station; Minaj Holdings and Gateway Electricity.
There are other 20 electricity generation firms in category five that are “not in operation and are not submitting quarterly reports to the commission.” They would be required to, within 30 days, provide justification for their licences or get it revoked.
Those in categories four and five were “notified of the intention of the commission to commence the process for the withdrawal of their licences on the grounds that these companies have failed to commission their licenced generating power station within three years from the date of their licences.”
Licensees in category two would only be notified of the commission’s intention to cancel their licences, while those in categories four and five have 30 days moratorium to convince the commission against the withdrawal of their licences. Firms in category three have 12 months moratorium to start construction.