Section 68 Nigerian Electricity Act 2023
Section 68 of the Electricity Act 2023 is about Distribution and supply licenses. It is under Part VI (Licensing) of the Act.
(1) Subject to the provisions of this Act and such terms and conditions as are contained in a distribution license issued to successor distribution companies, a distribution license shall authorise the licensee to construct, operate and maintain a distribution system and facilities. including the following activities as may be specified in the license —
(a) the connection of customers for the purpose of receiving a supply of electricity;
(b) the installation, maintenance and reading of meters, billing arid collection;
(c) expansion of the distribution network in the licensed areas; and
(d) such other distribution service as may be prescribed for the purposes of this section.
(2) A distribution licensee may also have the obligation to provide electricity to its customers, under the terms of a distribution license issued by the Commission to the distribution licensee.
(3) Subject to subsection (6), a distribution licensee may purchase power for resale —
(a) from a generation licensee;
(b) another trading licensees; and
(c) under any rights and obligations novated to it under section 7 (2) of this Act:
Provided all contracts for bulk purchase of electricity by a distribution licensee shall be awarded according to an open, transparent, and competitive manner, under a procedure established by the Commission, unless the circumstances require otherwise, and the Commission allows or requires ar. alternative method.
(4) Notwithstanding the provisions of subsection (1), the Commission shall approve a distribution or supply f:anchising arrangement or any other commercial arrangement between the distribution or supply licensees and third parties within the respective distribution or supply licensees’ operations and coverage areas in accordance with approved franchising terms, franchising models, tariffs as may be approved by the Commission:
Provided that the franchisee shall not be deemed to hold a distribution or supply license or sublicense but shall operate under the terms of distribution and supply licensee’s license, whichever is applicable, with the distribution and supply licensees being ultimately responsible for quality distribution and supply of electricity in their respective licensed areas of operational coverage.
(5) For the purpose of subsection (4), the Commission may approve a request for electricity distribution franchising at any time during any of the market stages recognised under this Act and the market rules, taking into cognisance the aggregate tenure of licenses held by successor distribution companies, any disaggregation of
the distribution licenses into distribution and supply licenses and such distribution franchising framework as may be put in place by the Commission.
(6) Without prejudice to the right and obligations of a successor distribution company, the Commission shall at any stage of the market it considers appropriate, recognise electricity supply as a separate activity from distribution and accordingly issue a directive for the disaggregation of distribution licenses into supply and distribution licensed companies in accordence with the provisions of this Act,
(7) For the purpose of subsection (6), the Commission shall implement a transfer scheme for the disaggregation of successor distribution companies or other distribution licensees into supply and distribution licensees, prescribing in such order, the phases for the transfer of functions, property, interest and liabilities relating to the supply of electricity to intermediary companies to be incorporated by successor companies under the Companies and Allied Matters Act, or any law replacing same to function as a supply license in accordance with the transfer order as may be issued by the Commission under this section.
(8) On completion of the transfer scheme under subsection (7) —
(a) successor distribution licensees or other distribution licensees as the case may be, shall cease to function as distribution and supply licensees but only as distribution licensees and in accordance with distribution license
issued by the Commission under this subsection to cover their unexpired aggregate license tenure of its distribution license or under the terms of a renewed license granted by the Commission; and
(b) the intermediary companies described under subsection (7) shall be issued distinct supply licenses and shall function as supply licensees in accordance with the provisions of this Act and such terms and conditions
as may be stipulated by the Commission in its supply license.
(9) The Commission shall grant independent electricity distribution network and independent electricity distribution network operators license to construct, own, operate, maintain or procure the construction and maintenance of independent electricity distribution network within an area with no existing distribution system or where the existing distribution infrastructure owned by the distribution licencee is unable to meet the demands of such customers giving due regard to the independent electrici-y distribution network operator framework as may be approved by the Commission for this purpose.
(10) Where the provisions of this section or any other part of this Act authorises a distribution or supply licensee to receive financial contributions from electricity consumers to fund the acquisition, installation and maintenance of electricity distribution transformers or other related equipment, such financial contribution shall be outside the usual obligations of consumers.
(11) Notwithstanding the provisions of subsection (9), any willing and capable electricity consumer may make financial contribution to fund the acquisition, installation and maintenance of electricity distribution transformers or other related equipment for the purpose of ensuring stable electricity supply where —
(a) the electricity, distribution or supply licensee is unable to provide such transformer or equipment within a reasonable time;
(b) there is a prior written request by the electricity consumer to the electricity company specifying —-
(i) the name, address, occupation or nature of business of the consumer,
(ii) the amount to be contributed and the capacity of distribution transformer to be procured and installed,
(iii) the location of the distribution transformer to be procured with
the funds contributed and the number of customers likely to enjoy improved power supply in the area as a result of the transformer to be procured, and
(iv) the need for a meeting or consultation and agreement regarding the request made under this section.
