In practical terms, yes, of course, it can happen. But where due process is followed, this should not happen. The Transmission Company of Nigeria (“TCN”) cannot connect an applicant to the grid without the applicant having obtained the required regulatory authorisation or approval as an eligible customer.
It is irrelevant that such an applicant made an application to the Nigerian Electricity Regulatory Commission (NERC) for the Eligible Customer (“EC”) Status or has entered into a Power Purchase Agreement with a Generation Company (“GenCo”). In the past, it was erroneously assumed that once a customer applicant presents an executed Power Purchase Agreement (“PPA”) and provides evidence that the applicant has sought the necessary regulatory approvals, TCN could proceed to approve the transaction. However, this is illegal as there is no basis for such a connection in the first place. Imagine that a land purchaser went ahead to develop land without the perfection of the title to the land or without conducting due diligence at the Lands Registry. Such a prospective land prospector could end up losing any improvements he made on the land if the title is later shown to be defective. In other words, pending the approval by NERC for the EC status, an applicant must regularise its contractual relationship with the DisCo in its franchise area for it to be directly connected the a GenCo through the grid.
Section 3 of the TCN’s licence terms and conditions expressly state that “the Licensee shall not enter into any agreement with any person if to do so would likely involve the Licensee to be in breach of codes, standards, or directions by the Commission or the Conditions in this licence.”
Section 64 of the Electricity Act stipulates that “a licensee shall comply with the provisions of its licence, regulations, codes, orders, and other requirements of the Commission.”
