The Nigerian Electricity Regulatory Commission, NERC, has disclosed that all capital expenditure by the Transmission Company, TCN, in excess of N5 billion or a revision of existing contract sum in excess of 15 percent shall be reviewed by it.
The Commission ordered TCN to file a proposed annual investment plan and revenue requirements/budgets/estimates with it by 31 October of the preceding financial year for review and approval.
NERC in an order titled ‘Mandatory filing of annual Opex, capital investment plans and outcomes of procurements conducted by the transmission company of Nigeria Plc’, released yesterday said where the approved capital investment plan is amended by the National Assembly and passed in the Appropriation Act, the amended plan shall be filed with the Commission within 30 days of presidential ascent to the Appropriation Act.
It stated that the revenue requirement “shall clearly indicate the proposed operating expenses under various headings with sufficient justification. Where unforeseen circumstances result in the amendment of an approved spending plan, the proposed amendment shall be filed with the Commission for approval”.
The Commission order signed by its Chairman, Sanusi Garba and Commissioner, Legal, Licensing and Compliance, Dafe Akpeneye also stated that for TCN to review existing contracts by above 15 percent would be based on “the condition in TCN’s licence mandating the filing of annual budget/estimate of investments and revenue requirements with the Commission to ensure prudence, transparency, and value-for-money in the yearly expenditures; and ensure adequate provision for cost recovery pursuant to section 96(2)(a) of EPSRA.
“Consistency with TCN’s PIP (performance improvement plan) approved by the Commission, alignment with the investment plan of DisCos and dependencies with other intervention projects.
“Availability of funds to commence and deliver projects within contracted delivery periods except for factors beyond the reasonable control of the parties. TCN shall be required to provide evidence of funding beyond the initial advance payment to the contractor”.
The Commission also ordered that all capital expenditure allowance not expended in a budget year shall be clawed back during the year-end minor review.