NIGERIAN ELECTRICITY REGULATORY

COMMISSION

MINI-GRID REGULATIONS, 2023

REGULATION NO: NERC - R - 117 - 2023

 NIGERIAN ELECTRICITY REGULATORY COMMISSION

In exercise of the powers conferred on the Nigerian Electricity Regulatory

Commission (“NERC" or the “Commission") to make regulations under section 226
of the Electricity Act ("EA" or the “Act") and other enabling powers, the
Commission hereby makes the following regulations for mini-grids -

Arrangement of Sections

CHAPTER I
GENERAL

Short Title
Commencement
Interpretation
Application of the regulation

CHAPTER II
FEATURES OF MINI-GRIDS

Structure/arrangement
Geographical delineation of distribution systems

CHAPTER III
REGISTRATION; GRANT OF PERMIT AND MANDATORY CONDITIONS

7. Isolated mini-grids larger than 1 OOkW of distributed power and up to 1 MW

of generation capacity
8. Isolated mini-grids up to 1 OOkW of distributed power
9. Interconnected mini-grids
10. Application procedure for a permit
11. Obligations of the mini-grid Permit Holder
12. Accounts of the mini-grid Permit Holder
13. Inspection of accounts
14. Transfer of mini-grid permit and business

CHAPTER IV
MINI-GRID OPERATION UNDER A PERMIT OR REGISTRATION

15. Installation and maintenance of the mini-grid

16. Quality of service
17. Safety
18. Environmental protection

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19. General provision for connection of customers
20. Interconnection of the distribution licensee's network to an isolated mini-grid
operated under a mini-grid permit and re-integration of an interconnected
mini-grid into the distribution licensee's network
21. Monitoring and evaluation of mini-grids

CHAPTER V
COMMERCIAL ARRANGEMENT

22. Determination of tariffs and other charges

CHAPTER VI
MISCELLANEOUS

23. Exclusivity period and site reservation for project development purposes
24. Procedure for rectification of non-compliance with the terms and conditions of
a permit.
25. Proceedings before the Commission
26. Complaint procedure
27. Dispute resolution
28. Amendment or repeal

SCHEDULES

FORMS TO BE FILED BY THE MINI-GRID DEVELOPER FOR ENGAGEMENT WITH

NERC

Schedule 1: Agreement form for an exclusive project development period at a site.

Schedule 2: Registration form for mini-grids with distributed power of up to
lOOkW.
Schedule 3: Application form for mini-grid permit
Schedule 4: Reporting form

GUIDELINES

Schedule 5: Application proceedings for permits

Schedule 6: Health and safety guidelines
Schedule 7: Technical requirements for registered mini-grid operators
Schedule 8:
Recommendations for calculation of usage charges by distribution
licensee in interconnected mini-grids
Schedule 9: Complaints procedure guidelines

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 CONTRACT TEMPLATES

Schedule 10: Tripartite contract between interconnected mini-grid operator,

distribution licensee and connected community
Schedule 11: Contract template between isolated mini-grid operator and
community
Schedule 12: Mini-grid customer contract template
Schedule 13: Asset handover document and compensation confirmation sheet

CALCULATION TOOLS

Schedule 14: Tariff calculation tool based on the MYTO methodology.

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 CHAPTER I
GENERAL

1. Short Title

These Regulations may be cited as the Mini-Grid Regulations, 2023.

2. Commencement

1. These Regulations shall come into effect on the date it is approved by

a resolution of the Commission.

2. The Regulations shall be signed by the Chairman of the Commission

who shall cause the seal of the Commission to be affixed thereon.

3. Interpretation

1. In these Regulations, unless the context otherwise requires -

"Act’ means the Electricity Act 2023.

Business Rules"mean the Nigerian Electricity Regulatory Commission

(Business Rules of the Commission) Regulations, 2006 or any
subsequent amendment thereof.

"Commission"means the Nigerian Electricity Regulatory Commission

("NERC").

"Community' means a group of people within the same geographical

location organised under a recognised local leadership structure or a
legal recognised corporate entity and in both cases capable of
entering contracts and being capable of suing and being sued.

"Connected Community' means a defined community of end-use

customers in a designated geographical location connected to the
distribution network of a distribution licensee.

"Connection Point" means an entry or an exit point on a distribution

network.

"Distributed Generation" means electricity generation from various

small-scale, decentralized sources connected to the mini-grid or
distribution system or directly to the point of use.

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"Distribution Code" means the code and guidelines approved by the
Commission for electricity distribution systems in Nigeria.

*■Distribution Company"or "DisCo" means a holder of a Distribution

Licence who operates a distribution network that is connected to the
transmission system operated by the system operation licensee.

"Distribution Licensee" means a holder of a distribution licence issued

by the Commission.

"Distribution Network" means any connection of cables, service lines

and overhead lines, electrical apparatus/equipment and having
design voltage of 33kV and below used to transport electric power on
a distribution system.

"Feeder"means a low voltage or medium voltage line on a distribution

network that is capable of supplying or absorbing at least 30kVA of
electricity in compliance with the Distribution Code.

"Fuel"'means materials such as gas, or diesel that is burned to produce

electric or heat energy.

"Generation" means the production of electricity that is fed into an

isolated mini-grid, interconnected mini-grid or directly to an end-use
customer.

"Generation Capacity"means the aggregate power that a generation

plant can produce at any point in time for at least (1) one hour under
specified environmental constraints (temperature, humidity, etc.) with
a power factor of 0.8 (inductive).

"Independent Electricity Distribution Network Operator" or "IEDNO"

means a distribution network not directly connected to a transmission
system operated by the system operator. For the specific purpose of
this Regulation, the term IEDN shall exclude mini-grids.

"Independent Electricity Distribution Network Operator" or "IEDNO"

means the holder of an IEDN licence issued by the Commission.

"Interconnected mini-grid" means a mini-grid that is connected to the

network of a Distribution Licensee.

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"Isolated mini-grid" means a mini-grid that is not connected to a
Distribution Licensee's network.

"Licence"means a licence granted by the Commission under the Act.

"Licensee" means any person who holds a Licence issued by the

Commission.

"Metering Code" means the Nigerian Metering Code approved by

the Commission for use in measuring the flow of energy in transmission
and distribution systems in Nigeria.

"Mini-Grid" means any electricity supply system with its own

generation capacity, supplying electricity to more than one customer
and which can operate in isolation from or be connected to a
Distribution Licensee's network. In these Regulations, the term mini­
grid is used for any isolated or interconnected mini-grid generating
between OkW and 1 MW of generation capacity per site.

"Mini-Grid Developer" means a legal entity established under

Nigerian law that has applied for registration or a permit with the
Commission for the operation of an isolated or interconnected mini-
grid.

"Mini-Grid Operator" means a person or an entity that is registered

or issued a permit by the Commission for the operation of isolated or
interconnected mini-grids.

"Mini-Grid Permit" or "Permit" means a permit granted by the

Commission to a mini-grid operator.

"Mini-Grid Permit Holder" means a person that holds a mini-grid

permit issued by the Commission for the operation of isolated or
interconnected mini-grids.

"NESIS Regulation" means the Nigerian Electricity Supply and

Installation Standards Regulation.

"Portfolio ofInterconnected Mini-Grids" means a set of interconnected

mini-grids as determined by the mini-grid developer, for which tripartite
agreements with the same Distribution Licensee have been signed and
filed simultaneously with the Commission for approval.

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 "Portfolio of Isolated mini-grids" means a set of isolated mini-grids as
determined by the mini-grid developer, which is filed with the
Commission for approval simultaneously.

"RegisteredMini-Grid Operator"means a mini-grid developer that has

completed the Commission's registration process for the operation of
one or more systems of less than 10OkW of Distributed Generation
capacity per site.

Registration" means the filing with the Commission of a registration

form by a mini-grid developer for one or more system(s) of up to
10OkW of distributed power per site.

"Technical Codes"means the Grid Code, Distribution Code, Metering

Code, Health & Safety Code, NESIS Regulation and other codes
approved by the Commission for the technical regulation of the
Nigerian Electricity Supply Industry.

"Tripartite Contract" means the contract executed by the

Interconnected Mini-Grid Developer, Distribution Licensee and
Connected Community and approved by the Commission.

"Underserved Area" means an area within a distribution licensee's

network with an existing but dysfunctional distribution system resulting
in poor quality of supply.

"Unserved Area" means an area within a distribution licensee's

network without an existing distribution system, otherwise called off-
grid.

2. Unless otherwise specified, in these Regulations -

a. Words importing any one gender includes the other gender and
the singular includes the plural and vice versa;

b. Words or expressions used in the Regulation but not defined

shall have the same meanings respectively assigned to them in
the Act.

c. Any reference to a statute or statutory provision includes a

reference to that provision as amended, re-enacted or replaced

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 and any regulations or orders made under such provisions from
time to time; and

d. If the date on which an event is scheduled to occur by this

regulation is a day which is not a business day, then the event
shall be deemed to occur on the next business day.

4. Application of the Regulations

Without prejudice to the provisions of sections 2{2), 63(2)(b) and 230 of the
Act, these Regulations shall apply to all mini-grids with generation capacity
of up to 1MW per site, the owners, mini-grid permit holders, mini-grid
operators, and customers served by mini-grids as well as all other private or
public stakeholders such as the distribution licensees.

CHAPTER II
FEATURES OF MINI-GRIDS

5. Structure/Arrangement

1. A mini-grid may be an -

a. Isolated mini-grid; or

b. Interconnected mini-grid

2. A mini-grid shall have a dedicated power generation facility that

provides electricity supply to its network which may be operated by
the mini-grid operator, or a person contracted by the mini-grid
operator to provide generation capacity to the mini-grid network.

6. Geographical Delineation of Distribution Systems

1. The Commission may, upon consideration of an application filed by a

mini-grid developer -

a. grant a permit to construct, own, operate or maintain an

isolated mini grid in a designated unserved area.

b. approve a tripartite agreement to construct, operate and/or

maintain an interconnected mini-grid in an underserved area
within a geographical location.

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 2. All mini-grid developers applying for mini-grid permits shall file
application with the Commission providing information that includes -

a. Details of the generation system that shall supply the mini-grid

network.

b. An accurate description of the proposed distribution network.

c. Geographical details of the network.

d. Any other information that the Commission may require.

3. The geographical depiction referred to in sub-section (2) of this section

shall be in the format prescribed schedule 3 to these Regulations or as
requested by the Commission.

4. Where there are different feeders being connected to the same

generator, the Commission may -

a. define each feeder as separate mini-grid; or

b. all feeders grouped together as one mini-grid;

to the extent that the aggregate power generated and distributed

through these feeders does not exceed 1 MW, or any capacity as may
be approved by the Commission.

CHAPTER III
REGISTRATION; GRANT OF PERMIT AND MANDATORY CONDITIONS

7. Isolated mini-grids larger than 1 OOkW of distributed power and up to 1 MW

of generation capacity

1. The Commission may grant a permit referred to in section 6(1) of these

Regulations for an isolated mini-grid where the applicant is in
compliance with the underlisted conditions -

a. the application has complied with requirements for the grant of

a permit for the proposed location to be served by the mini-grid;

b. confirmation that the mini-grid investment into the designated

unserved area shall not interfere with the Distribution
Company's ("DisCo") network expansion plans as contained in

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 the Performance Improvement Plan ("PIP")/investment plan
accompanying the most recent tariff review application
submitted to the Commission OR a written consent from the
DisCo for the proposed mini-grid if the project area is covered
by the DisCo's expansion plan as approved by the Commission;

c. the intended geographic location is an unserved area which has

not been assigned to an IEDNO or any other mini-grid
developer;

d. filing of executed agreement between the community and mini­

grid developer for registration by the Commission in the form of
schedule 11 or in a form mutually agreed between the parties;

e. submission of the verifiable coordinates for the geographic

location where the mini-grid shall be installed and where its.
network shall cover, having acquired all other necessary
permits in respect of the location from all relevant authorities;

f. the end-user tariff is calculated based on the MYTO

methodology and approved by the Commission; and

g. the health and safety confirmation form in schedule 6 to these

Regulations have been executed and submitted to the
Commission.

2. The confirmation and consent required under section 7(1 )(b) and (c)
of these Regulations shall be provided by the DisCo within 15 business
days of being addressed to the DisCo's managing director and served
at the DisCo's headquarters. Where the DisCo neglects, fails, refuses,
or to respond within 15 business days of being served the request for
confirmation and consent by the mini-grid developer, it shall be
deemed that the DisCo has consented to the request of the mini-grid
developer.

8. Isolated Mini-Grids up to lOOkW of Distributed Power

1. The mini-grid developer of an isolated mini-grid with a distributed

power not exceeding lOOkW may -

a. apply for a permit referred to in section 6(1) of these

Regulations in compliance with the procedures specified in
section 7(1) of these Regulations with all rights and obligations

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 of a mini-grid permit holder as described under these
Regulations; or

b. apply for registration using the form prescribed in schedule 2 of

these Regulations.

9. Interconnected Mini-Grids

1. Where a mini-grid is interconnected, the duly authorised

representatives of the connected community, the mini-grid developer
and DisCo shall sign a tripartite contract covering the transaction, and
the tripartite contract shall be filed with the Commission for approval.

2. Where an application has been filed for an intended area, the

Commission may register the tripartite contract and grant the mini-grid
permit, where the -

a. the proposed retail tariff is calculated using the MYTO

methodology and agreed by the mini-grid developer, the
distribution licensee and connected community, and approved
by the Commission;

b. the tripartite agreement shall cover the following

arrangements -

(i) right to access the DisCo's network infrastructure for the

purposes of interconnection.

(ii) construction and ownership right for additional

infrastructure, where applicable,

(iii) tariff for electricity generated by the mini-grid and fed

into the distribution licensee's network where applicable,

(iv) availability of stable nominal voltage and effective

system protection at the connection point of the
generator with the DisCo's network, where applicable,

(v) tariff for the purchase of electricity from the distribution

licensee's network, where applicable; and.

(vi) consent of the connected community to purchase

electricity from the mini-grid at the defined tariffs.

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 Where an area has been identified either by a connected community
or mini-grid developer, and a notification is made to the Commission
to consider the development of an interconnected mini-grid, a mini-grid
developer shall submit a technical and investment proposal to the
DisCo.

10. Application Procedure for a Mini-Grid Permit

1. The Commission may grant a permit where the conditions provided in

sections 7 and 9 of these Regulations are fulfilled by the applicant.

2. The Commission may issue a permit pursuant to section 7 or 8 of these

Regulations or approve a tripartite contract pursuant to section 9 of
these Regulations to an applicant within a period not exceeding 30
working days from date of the applicant files an application that meets
all the requirements.

3. The application proceedings in sections 7, 8, and 9 of these

Regulations are described in schedule 5 and where schedule 5
deviates from these Regulations, these Regulations shall prevail.

4. A registered mini-grid operator who intends to operate as a mini-grid ■

permit holder shall:

a. use the MYTO methodology or any other methodologies that

may be approved by the Commission shall be adopted in the
determination of its tariff.

b. be compensated by the DisCo as provided for in section 20(3)

of these Regulations, where a mini-grid permit has been granted
by the Commission.

11. Obligations of the Mini-Grid Permit Holder

1. The mini-grid permit holder shall construct, operate and/or maintain

its distribution network in accordance with the relevant technical codes
and standards.

2. The mini-grid permit holder shall comply with the Act, terms and
conditions of the mini-grid permit, the tripartite contract, the
agreement with the community or connected community as applicable,

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 customer contract, the rules, and regulations, as well as the decisions,
orders, and directions of the Commission.

3. The mini-grid permit holder shall comply with all other regulations
issued by the Commission.

4. The mini-grid permit holder shall grant the Commission and its duly
authorised representatives* access to its sites and provide any
information requested by the Commission.

12. Accounts of the Mini-Grid Permit Holder

1. The mini-grid permit holder shall -

a. maintain separate accounting records for the mini-grid business,

including the business of utilising the assets of a DisCo's
network, in the prescribed form and contain such particulars as
may be specified by the Commission and in accordance with the
Companies and Allied Matters Act.

b. prepare from the records referred to in paragraph (a) of this

regulation, accounting statements for each financial year
comprising a profit and loss account and a balance sheet; and

c. ensure that the accounting statements prepared in accordance

with the foregoing paragraphs are duly certified by an
independent auditor in respect of each financial year, stating
whether in the opinion of the auditor, the statement has been
properly prepared and giving a true and fair view of the
revenue, costs, assets, liabilities and reserves reasonably
attributable to the business to which the statement relates.

13. Inspection of Accounts for the Purpose of Adjustment of Tariffs and

Ascertaining Depreciated Value

1. Any person authorised by the Commission shall be entitled to inspect

and verify the accounts of a mini-grid permit holder at any reasonable
time and the mini-grid permit holder shall be under obligation to render
all necessary assistance and provide the required documents to the
person authorised to inspect the accounts.

2. The mini-grid permit holder shall provide reports in the form prescribed
in schedule 4 of these Regulations to the Commission for each mini-

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 grid or a combined report for a portfolio of mini-grids at least once
every year, except where a different frequency is prescribed by the
Commission.

3. Where following an inspection of accounts, the Commission proves

that the actual costs incurred by the mini-grid permit holder exceeds
the approved range of benchmark costs in the tariff model or the actual
revenues earned by the mini-grid permit holder deviate from the
revenues stated when the application was filed;

a. the input parameters for tariff calculation using the MYTO

methodology shall be adjusted to the actual values; and

b. the tariffs as well as the calculation of the depreciated value

shall be adjusted and approved by the Commission
accordingly.

The new tariffs as adjusted in section 13(3) of these Regulations shall

be applied within 30 days of approval by the Commission.

4. A mini-grid permit holder may request for an account inspection by

the Commission to update its tariffs and depreciated assets value by
filing a formal request with the Commission.

5. A community or connected community may request for inspection of

accounts of the mini-grid operator by the Commission for the purpose
of triggering a review of its tariffs, including a review of a fair value
of any addition and/or retirement of capital assets by filing a formal
request with the Commission. *

14. Transfer of Mini-Grid Permit and Business

1. A mini-grid permit holder shall not, without the prior written consent of
the Commission, transfer, assign, or sell to another person or in any
other way dispose of all or any part of the permitted business carried
out under a mini-grid Permit granted by the Commission.

2. An application for consent under these Regulations shall be filed along

with the following documents:

a. Application letter to the Commission seeking consent.

b. Certificate of incorporation and memorandum and articles of

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 association of the transferee.

c. Board resolution of the mini-grid permit holder approving the

transfer to the transferee.

d. Board resolution of the transferee company accepting the

transfer.

e. Original mini-grid permit certificate and terms and conditions

issued to the mini-grid operator by the Commission; and

f. Documentary evidence of the technical capability or capacity of

the transferee company to operate the mini-grid.

CHAPTER IV
MINI-GRID OPERATION UNDER A PERMIT OR REGISTRATION

15. Installation and Maintenance of the Mini-Grid Operated Under a Permit

1. The mini-grid permit holder shall design, construct, commission,

operate or maintain and de-commission its distribution network and
related facilities in compliance with the Technical Codes and
Standards, terms and conditions of its permit and tripartite contract as
applicable and in accordance with any other standards of design,
construction, and maintenance as prescribed by the Commission.

2. Where there is any inconsistency between these Regulations and the

Technical Codes and Standards, the provisions of the Technical Codes
shall prevail.

3. The registered mini-grid operator is not bound by the Technical Codes

and Standards for design, construction, commissioning, operation,
and maintenance of its distribution systems, but may apply the
minimum technical requirements as set out in schedule 7.

16. Quality of Service

1. The mini-grid permit holder shall supply electricity in accordance with

the terms of the contract with the community or connected community
as prescribed in schedule 10 and 11 of these Regulations.

2. The registered mini-grid operator shall supply electricity in accordance

with the terms of his contract with the community.

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17. Safety

All mini-grid operators shall apply the safety guidelines as described in

schedule 6 of these Regulations for the design, construction, commissioning,
operation and maintenance of their generation and distribution assets.

A mini-grid operator shall comply with the environmental laws affecting their
operations and any compliance breach would be treated as an infraction
leading to the suspension or termination of their permit.

18. Environmental Protection

A mini-grid operator shall comply with the environmental laws affecting their
operations and any compliance breach would be treated as an infraction
leading to the suspension or termination of their permit.

19. General Provision for Connection to Customers

1. The mini-grid permit holder shall enter into the standardised connection
agreements as prescribed in schedule 12 of these Regulations with any
customer who accepts to connect to the mini-grid.

2. The provisions of the Metering Code shall apply to all mini-grid

installations operated under these Regulations, except where specific
derogation is given by the Commission to adopt other standards
outside the Metering Code or pending a review of the Metering Code.

3. The Commission may, at the request of the mini-grid operator, grant a

derogation from sub-section (2) of this regulation where it deems fit.

4. The tariff and billing model for mini-grids operated under a permit shall
be described in the contract between the mini-grid operator and the
customers in the community as prescribed in schedule 12.

20. Interconnection of the Distribution Licensee's Network to an Isolated Mini-

Grid operated under a Mini-Grid Permit and Re-integration of Interconnected
Mini-Grid into a Distribution Licensee's Network

1. A mini-grid permit holder shall only operate in the defined

geographical area approved by the Commission in its permit or
tripartite contract.

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2. Where a DisCo intends to extend its network to an isolated mini-grid
operated under a permit, the DisCo shall notify the mini-grid operator
in writing no later than 12 (twelve) months before the grid extension
is expected to reach the isolated mini-grid.

Where a DisCo extends its network to an isolated mini-grid operated

under a permit, the following options are available to the mini-grid
permit holder -

a. convert to an interconnected mini-grid operator, in compliance

with the provisions of sections 9 and 10 of these Regulations;
or

b. transfer all the distribution assets of the mini-grid to the DisCo

in return for compensation as follows -

(i) the isolated mini-grid permit holder shall receive a

compensation from the DisCo before the handover of
assets. Such compensation shall be composed of the
following -

• the book value of the depreciated network assets

(based on the historical acquisition cost, including the
construction and development cost) as defined during
the tariff definition by the Commission.

• an equivalent of the pre-tax profit the mini-grid

developer earned from the mini-grid, commencing 24
months prior to the handover date.

(ii) The DisCo shall document the payment process as in

schedule 13 and file the signed copy with the
Commission;

c. Having transferred its distribution asset to the Disco, the

minigrid may, if mutually agreed, deploy its generation asset
as an embedded generator to the DisCo or become an
emergency supplier to niche customers during DisCo supply
outages.

4. Pursuant to section 20(3)(b) of these Regulations, the mini-grid permit

holder shall be allowed to continue operating the mini-grid in

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 accordance with the mini-grid permit until they are fully compensated
by the DisCo and the DisCo shall not disrupt or obstruct the mini-grid
permit holder's activities.

5. Notwithstanding the provisions of section 20(3)(b) (iii) of these

Regulations, the capital costs and asset depreciation period fixed with
the tariff approval shall apply and the costs of assets not covered in
the rate base shall not be refunded to the mini-grid operator.

6. For the purpose of compensation, the depreciation of assets shall be

in line with the MYTO methodology or as may be approved by the
Commission.

7. The mini-grid permit developer shall, where possible, remove and

recycle or dispose the assets and equipment that has expended their
useful life in an environmentally friendly manner in accordance with
environmental legislation and the mini-grid permit holder may follow
the guidelines on environmental matters specified in schedule 6.

8. Where a DisCo extends its distribution network to an area covered by

a registered mini-grid, on the request of the DisCo, the registered mini­
grid operator shall decommission and remove all its assets and
equipment within 2 (two) months after the DisCo has commenced
operations in the area. Prior to the installation of DisCo infrastructure,
both parties will jointly file a decommissioning plan to ensure safety
during the transition.

9. Upon expiration of a tripartite contract for an interconnected mini-grid,

and where it is not renewed, a DisCo may re-integrate the
interconnected mini-grid into its network subject to -

a. the written proof of endorsement by the connected community;

and

b. notification to the Commission; and

c. payment of compensation to the mini-grid permit holder

12. All mini-grid operators shall abide by the compensation procedure

described in section 20(3)(b) of these Regulations unless otherwise
mutually agreed in the tripartite contract.

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21. Monitoring and Evaluation of a Mini-Grid

1. conduct regular monitoring and evaluation of activities on the mini-

grid in order to ensure compliance with the Regulations, sustainability
and enhance data-driven electrification planning.

2. The mini-grid operator shall file with the Commission a report of its
monitoring and evaluation ("M&EW) activities in compliance with the
M&E reporting template in schedule 4, or in accordance with the terms
and conditions of the permit and/or registration. The required
information shall be filed in hardcopy or through digital platforms
approved by the Commission.

CHAPTER V
COMMERCIAL ARRANGEMENT

22. Determination of Tariffs and Other Charges

1. The interconnected mini-grid permit holder shall pay the DisCo a

Distribution Use of System("DUOS") Charge which shall be agreed
upon between the interconnected mini-grid permit holder and the
DisCo and approved by the Commission.

2. Where the interconnected mini-grid permit holder and the DisCo are
unable to agree on the usage charges, the methodology prescribed in
schedule 8 of these Regulations shall be applied.

3. The MYTO methodology included in schedule 14 of these Regulations

and approved by the Commission shall be used to determine the retail
tariffs and other charges for a mini-grid permit, subject to a limitation
that:

a. allowable, technical losses shall not exceed 4%; and

b. allowable non-technical losses shall not exceed 3%.

4. A mini-grid permit holder may -

a. file a single tariff application for all sites under a portfolio of

isolated mini-grids or a portfolio of interconnected mini-grids.

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 b. file an individual tariff application for each site under a
portfolio of isolated mini-grids or a portfolio of interconnected
mini-grids.

c. the tariff control period in the MYTO model shall be 5 years.

5. The registered mini-grid operator may decide to determine retail tariffs

and other charges by -

a. the use of the MYTO calculation tool in schedule 14 of these

Regulations; or

b. an agreement between the mini-grid operator and the

community (represented by customers consuming not less than
60% of the electrical output of the mini-grid). This is subject to
the Commission's right in section 13 of these Regulations, to
intervene and review the tariff that has been agreed with the
Community for equity and fairness.

c. The executed agreements in sub-section 22(5)(b) of these

-f*5”
Regulations shall be filed with the Commission for purposes.

CHAPTER VI
MISCELLANEOUS

23. Exclusivity Period and Site Reservation for Project Development Purposes

1. The procedure to acquire or renew an exclusivity agreement for

project development purposes by an isolated mini-grid developer shall
be -

a. A community may grant -

(i). an exclusive right to develop an isolated mini-grid project

at a certain site; and

(ii) to the mini-grid developer; an exclusivity period of up to

12 (twelve) months as shown in schedule 1 of these
Regulations, or as may be amended and agreed
between the mini-grid developer and the community.

b. Where required, the isolated mini-grid developer may request

the Commission for an extension beyond 12 (twelve) months

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 upon justification as prescribed in schedule 1 of these
Regulations.

c. The mini-grid developer shall file the exclusivity agreement and

the extension to the Commission for registration upon execution
by the parties.

d. The DisCo and the community may grant an exclusive right to

develop an interconnected mini-grid project at a certain site as
shown in schedule 1 to these Regulations, or as may be
amended and agreed between the mini-grid developer, the
DisCo and the community.

2. The community or the DisCo may request the developer to provide

proof of its commitment e.g. Letter of Intent ("Lol") from an investor or
endorsement letter from the State Government before signing the
exclusivity agreement.

3. The Commission shall not grant a mini-grid permit to a mini-grid

developer for any site, where an exclusivity agreement or tripartite
contract has been executed in respect of that site by a different mini­
grid developer and registered with the Commission for the duration of
the exclusivity arrangement.

4. Notwithstanding the right granted in section 23(1 )(a) of these

Regulations, DisCos reserve the right to integrate the community into
their distribution network.

24. Procedure for Rectification of Non-Compliance with the Terms and/or

Conditions of a Mini-Grid Permit.

1. Where the Commission, on the basis of material evidence in its

possession is satisfied that the mini-grid operator has contravened, or
is likely to contravene, the terms and conditions of the mini-grid permit
or tripartite contract as applicable, it shall serve a notice on the mini­
grid operator to do, or refrain from doing anything specified in the
notice, to rectify or avoid any contravention or threatened
contravention of any term or condition of the permit or tripartite
contract as applicable.

2. The notice referred in this section shall specify the period within which
the mini-grid operator shall rectify or avoid the contravention or

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 threatened contravention of any term or condition of the mini-grid
permit or tripartite contract as applicable.

3. Failure to comply with the directives in the notice of rectification shall

attract applicable sanctions from the Commission.

25. Proceedings before the Commission

All proceedings before the Commission under these Regulations shall be

governed by the Business Rules of the Commission.

26. Complaints Procedure

All customer complaints shall be resolved in accordance with the Complaints

Procedure Guidelines in schedule 9.

27. Dispute Resolution

Any dispute between parties in connection with these Regulations shall be

resolved in compliance with the dispute resolution mechanism provided in
these Regulations or any other relevant instruments issued by the
Commission.

28. Amendment or Repeal

The Commission may amend or repeal, in whole or in part, the provisions of

these Regulations.

THE COMMON SEAL OF NIGERIAN ELECTRICITY REGULATORY COMMISSION

was affixed pursuant to the ORDER OF THE COMMISSION

4"I day of 2023

Dated this

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