Nigeria opens window for direct power sale to manufacturers under the eligible customer rule

The much talked about eligible customer rule is coming into effect with the opening of the window for manufacturers to buy bulk power from the generating companies

Babatunde Fashola, Nigeria’s minister of power, works, and housing, disclosed the opening Tuesday at a meeting with Manufacturers Association of Nigeria (MAN) in Lagos.

He said the window is now open for manufacturers to tap into the over 2,000MW unsold inventory of generating companies that cannot be wheeled by the distribution companies.

Fashola noted that it is imperative to open the window for the manufacturers in view of the fact that more power plants are expected to come on stream in 2018, which would increase the unsold inventory.

“There can be no better time to explore this option than when there is the inventory of unsold power, with the clear promise of more to come,” he said adding that the unsold and increasing inventory is what government is offering to manufacturers as a critical raw material to reduce the cost of production.

“This is why we declared the Eligible Customer Policy and NERC made the rules that guide its implementation, such that bulk power consumers purchase power from GENCOs directly, while ensuring that the business of DISCOs is protected,” he stressed.

He said Nigeria’s power generating companies are now able to produce 7,000 MW, which the transmission company is able to transport all of it but the distribution companies’ load taking capacity is 5,0000MW, leaving outstanding 2,000MW not be distributed and which manufacturers can buy directly from the generating companies

He clarified that under the EPSRA of 2005, the clear intention was that generation companies should be able to sell power to 3 (three) classes of persons: The bulk trader (NBET), the distribution companies, and the eligible customer.

“What we have largely seen are a sale to the Bulk Trader. What we gather to do today is to open the window for sales to the eligible customer,” he said.