Overview

The Nigerian Electricity Regulatory Commission (NERC) issued the 'Guidelines on Distribution Franchising in the Nigerian Electricity Supply Industry' on June 24, 2020, to provide regulatory guidance for distribution licensees (DisCos) seeking to enter franchise arrangements under Section 69(1) of the Electric Power Sector Reform Act (ESPRA). The guidelines aim to establish a light-handed framework for approving DisCo franchising, ensuring improved service to end-use customers, that DisCo obligations under their licenses are not compromised, and that customer care standards are strictly followed. The background notes that privatization of DisCos aimed to reduce technical and commercial losses, and franchising can stimulate investment in underserved areas, provide third-party investment opportunities, improve service quality, and create opportunities for customer groups. The franchise models considered include metering, billing and collection; total management of electricity distribution in a ring-fenced area; total management of distribution feeders including billing and collection; and loss reduction and provision of embedded generation. The Commission will review other innovative models. Commercial arrangements require tariffs to follow prevailing methodology approved by the Commission, and procurement of additional generation must comply with relevant regulations. The document outlines application procedures and conditions for revocation of franchise arrangements. The purpose, background, franchise model, commercial and contractual arrangements, application procedure, and revocation process are detailed. The document is a policy/guideline document, written in English.

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