TRANSACTION AND INDUSTRY REVIEW CONFERENCE

NIGERIAN POWER SECTOR REFORM:AN OVERVIEW OF TCN AGREEMENTS

OUTLINE

• INTRODUCTION

• CONNECTION AND INTERFACE AGREEMENT

• USE OF TRANSMISSION NETWORK AGREEMENT

• ANCILLARY SERVICES AGREEMENT

• CONCLUSION

INTRODUCTION

Applicable contracts:

•Connection and Interface Agreement (CIA)

•Use of Transmission Network System Agreement (TUOS)

• Ancillary Services Agreement (ASA)

CONNECTION AND INTERFACE AGREEMENT (CIA)

CIA

-A framework further to which site specific Agreements will be executed

-Relates to the rights and obligations of parties to connect to the Transmission Network System.

-Executed between TCN as Service Providers and Users of Transmission Network System. -Applies to user(s) who:

- has a direct connection of at least 11kv network supply; or

- an export or import capacity of at least 1mw.

CIA CONT’D

Key provisions

• Charges (Clause 7 of the CIA):

- to be determined periodically between TSP and NERC.

- payment made on or before end of the first month of a new calendar year.

- Payment shall be made once annually or as agreed by parties.

CIA CONT’D

• Right of access (Clause 11) - unhindered access granted to equipment of another party upon

reasonable notification (except in emergencies).

- This right extends to nominated third parties and contractors.

• Commercial and tariff metering (Clause 22 )

- Shall be exclusively for registering the quantity of energy that passes across the connection point.

- Only NERC licenced personnel are authorised to install, operate and maintain such meters.

CIA CONT’D

• Interface management Parties to jointly nominate an interface manager to oversee the implementation and maintenance of the interface management on the connection site.

• Other key provisions

- Connection and energisation,- Metering- Modifications- Operational metering- Restriction on title holders right- Relocation- De-energisation and disclosure- Decommissioning- Dispute Resolution.

USE OF TRANSMISSION NETWORK AGREEMENT (TUOS)

TUOS

• Relates to the rights and obligations of parties arising from the use of the Transmission Network System.

• Applies to user(s) whose equipment has:

– a direct connection of at least 11kV network supply; or

– an export or import capacity of at least 50 kV A.

TUOS CONT’D

Key provisions of TUOS

• Charges (Clause 8)

- Right to use arises only upon payment of the Transmission Network Charge.

- The charge shall be an annual payment prorated on a monthly basis.

- Based on agreement of parties it may also include one-off charges.

- The User is mandated to provide a security cover which will be resorted to in the event of User’s default.

- The security cover shall be determined and approved by NERC.

TUOS CONT’D

• Safety Rules (Clause 13):

- Parties mandated to provide copies of their safety rules and local safety instructions to each other.

- The SO and User are mandated to each appoint a Safety Coordinator to oversee safety precautions whenever work on the network

• De-energisation & disconnection (Clause 14):

- material breach by a User that will entitle the TSP to de-energise the User’s apparatus.

- If the breach is not remedied for a period of 6 months, TSP may declare such breach an event of default which may lead to termination and disconnection of the User’s apparatus.

TUOS CONT’D

• Assignment and sub-contracting (Clause 26):

- Assignment by parties of rights and obligations must first be approved by both NERC and the other party.

- TCN has the right to novate its rights and obligations to an Independent System Operator.

• Other key provisions:

- Operations- Right of access- Dispute resolution- Terms and termination- Force majeure-

PRE-TRANSITION RESERVE AND FREQUENCY CONTROL CONTRACT

(ANCILLARY SERVICES AGREEMENT)

ANCILLARY SERVICES AGREEMENT– Relates to the provision of certain ancillary services that are key to overall system stability.

– These services include:

• Operating reserve

• Frequency regulation

• Voltage regulation

• Black start capability

- Grid Code mandates the SO to procure the above ancillary services.

- The SO is the buyer and the Service provider is the seller of the ancillary service.

ANCILLARY SERVICE AGREEMENT CONT’D

Key provisions of ASA

- Reserve capability

- Reserve instruction

- Operational information flow

- Burden of proof-

- Frequency control

- Price -

- Reserve provided

- Taxes

- Payment

CONCLUSION

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