Experts on energy matters from across West Africa have validated the draft Regulation Relating to the Payment of Regulatory Fees on Regional Electricity Cross-border Trades, a legal document to facilitate a funding mechanism for the ECOWAS Regional Electricity Regulatory Authority (ERERA) and enable it operate as an autonomous and independent regulatory body.
According to the ECOWAS Commission, the energy experts agreed on the draft legal text at the end of their recent three-day meeting in Dakar, Senegal, following a request by regional energy ministers for them to find a consensus for the method of calculation and payment of regulatory fees, as well as its related regulation.
The legal texts setting up ERERA, which began operations in 2009, provide for ordinary and extra-ordinary sources of funding for the body, including contributions from regional market stakeholders.
According to ERERA’s financing plan, stakeholders’ contributions were to begin in 2012, on the assumption of an increased regional electricity trade. A lack of mechanism for determining the regulatory levy has however stalled the process.
Basic elements for the mechanism include completion of the approval process of the market rules and relevant documents to regulate the market, establishment of the market operator to determine and collect the levy, as well as the development of licences and rights to participate in the market.
Pending the adoption of an acceptable mechanism, the experts at the Dakar meeting agreed that the validated regulation for regulatory fees for ERERA would deal with the transition period only.
They also said it was necessary to immediately engage actors in the regional electricity sector to start making contributions to ERERA’s budget.
Specifically, the experts proposed that the operators in the electricity sector in each member state should contribute 30 per cent of ERERA’s budget during the transition period.
The experts’ proposals and the validated regulation will be considered at the next meeting of the ECOWAS Council of Ministers.