THE ELECTRICITY (DEVELOPMENT OF SMALL POWER PROJECTS) RULES, 2016

This section is about a preliminary engineering assessment and an estimate of interconnection cost.

This section is titled “Appeal.”

Section title only: Maximum Allowable Generation Capacity.

This section concerns applications for interconnection and the sale of electricity.

Section 18 is titled “Obligation to Pay Interconnection Costs” and relates to procurement of wind and solar power projects through competitive bidding.

This section is titled “Issuance of Request for Qualifications.”

This section is titled “Validity of Request for Qualifications.”

This section is titled about issuing a request for proposals, selecting preferred bids, and requiring preferred bidders to complete remaining project development steps.

This section limits these rules to wind and solar projects between 1 MW and 10 MW, bars public owned DNOs from procuring such projects except as allowed by the Rules, and lets private DNOs procure them if their procedures are competitive and approved by the Authority.

The Authority must declare how much solar and wind capacity will be procured in each bid round for the Main-Grid, subject to system reserve margin limits. SPP Developers may bid to substitute up to 75% of a DNO’s existing generating capacity for certain isolated Mini-Grid projects if demand and substation-capacity conditions are met.

A DNO may issue RFQ documents for small power project developers, and must first have EIPC prepare the documents and send them to the Tender Board for approval in the stated circumstances.

The RFQ stays open for 45 days, and late responses must not be accepted.

An SPP Developer may submit multiple bids for projects at the same site if interconnection-related costs are included in the bid price and the bids stay within a 30% cap of total declared procurement capacity.

DNO and EIPC must handle bid evaluation and publication within set deadlines.

A DNO must issue an RFP within the announcement of qualified bidders, and the RFP must be prepared by EIPC and approved by the tender Board before being issued to qualified bidders.

After the deadline date, the DNO must send all received bids to EIPC, and EIPC must open, evaluate, and rank the binding project proposals.

A DNO may reject a project proposal if the bid price is above the Authority’s calculated project costs and return on investment.

The DNO must notify preferred bidders and let them sign an SPPA after a second bid security payment is posted; the second bid security is refunded without interest only if stated conditions are met.

Preferred bidders who choose to sign an SPPA with a DNO must carry out the remaining project development steps.

A person aggrieved by a tender Board decision under this Part may appeal to the Public Procurement Regulatory Authority.

This section is titled “Execution of an SPPA” and appears under the commissioning procedure part.

An SPP developer must sign an SPPA within 90 days after a DNO delivers interconnection cost details, and the SPPA term is 25 operating years after Commercial Operation Date.

This section is about the DNO issuing an interconnection certificate.

This section is titled “Testing Prior to Interconnection” and relates to small power distributors and connection to the main grid of an SPP previously connected to a mini-grid.

An SPP developer must send quarterly progress reports to the DNO and the Authority, and must meet the Commercial Operation Date in the SPPA unless an approved extension is agreed.

An SPP developer may supply power to the Grid only after DNO verification of compliance, and the DNO must issue an interconnection certificate as evidence of compliance.

An SPP developer must finish commissioning testing before sending power to the DNO network, and must show the DNO that all required licences and permits have been obtained before selling electricity.

Section 35 is titled “Connection to the Main-Grid of an SPP Previously Connected to a Mini-Grid.”

This section is titled “An Entity Seeking to Operate as an SPD.”

This section is titled “Bulk Supply Tariffs to SPDs” and sits in Part VIII on tariffs.

An SPP developer must apply to the Authority for operating rights when a Mini-Grid SPP becomes connected to the Main-Grid, and may also remove or sell distribution assets after connection.

An entity seeking to operate as an SPD must ask the DNO for bulk supply details and copy the Authority; if the DNO does not reply in 30 business days, the entity may apply to the Authority.

Bulk electricity suppliers to an SPD must charge an Authority-approved tariff.

This section concerns tariffs for SPPs selling bulk power to the national or regional grid, or to DNO-owned mini-grids, and sales to eligible customers.

This section concerns applying for approval of a retail tariff.

This section concerns use of the REA Spreadsheet in retail tariff determination.

Section 44 is titled “Community to be Notified of any Tariff Application.”

Section 45 is titled “Backup Tariffs” and appears under Part IX, Working Group.

The Authority must revise certain feed-in tariffs every year, and SPP operators must charge either a feed-in tariff or a tariff approved by the Authority.

Tariffs are set differently depending on when the SPPA was executed and the technology used.

SPPs and SPDs selling electricity to retail customers must charge tariffs capped at specified cost items plus a reasonable return on capital. They may propose category-based tariffs for commercial sustainability only with the Authority’s approval.

An SPP agreement with an eligible customer to sell electricity under a power purchase agreement is exempt from tariff approval by the Authority, and the SPP developer must give the Authority a copy of the agreement and the agreed tariff.

SPPs and SPDs selling electricity to retail customers may propose retail tariff structures, may include certain financing items, and must use specified meters when measuring and regulating consumption.

An SPP developer may submit proposed tariffs based on REA project evaluation spreadsheets when applying to the Authority for retail tariff approval.

SPP or SDP developers must notify the community about a tariff application and submit proof of that notification to the Authority.

A DNO must provide backup power to an SPP that wants it, under stated contracting and pricing conditions.

This section is titled “Responsibilities of the Working Group.”

This section sets up a Working Group on small power development and describes how members, alternates, invitees, the chairperson, and the Authority are to be selected and managed.

The Working Group must meet and conduct business as required by the Authority and manage its own proceedings.

This section is titled “DNO SPP Unit” and appears under Part XI on Very Small Power Projects.

A DNO must establish an SPP Unit, and that unit must coordinate and support interconnection-related work for SPPs.

This section concerns evidence of land and resource use rights for VSPP.

Section 53 is titled “VSPP Wholesale Tariffs” and appears under Part XII on reporting and compliance monitoring.

VSPPs are generally exempt from these Rules, but a VSPP operation may voluntarily choose in writing to be bound by them and notify the Authority.

If a VSPP operator chooses to be bound by these Rules, it must submit evidence of land and resource use rights to the Authority.

If a VSPP operator wants to sell electricity wholesale to a DNO, it must apply for and obtain an LOI, a PPA, and an interconnection agreement, subject to sub-rule (2).

A VSPP operator selling to a retail customer does not have to apply for approval of retail tariffs, but the Authority may review the tariff if it receives a petition signed by 15% of households in the service area.

Section heading only; no rule is stated in the provided text.

A DNO must consult REA and, by 1 January each year, issue a document on planned distribution expansion for the next 12, 24, and 36 months. It must also publish, in widely circulated newspapers, a yearly list of signed SPPAs and LOIs with specified project details.

SPP developers, SPPs, and SPDs must submit reports to the Authority about their facilities and operations, including an annual report within 90 days after the financial year ends.

SPP developers, SPPs, and SPDs must not refuse required information or give false information to the Authority; breaches can lead to fines and, for a second breach, licence suspension.

A Small Power Producer or SPD must carry out compliance audits when directed by the Authority and send the results to the Authority within 90 days after the audit ends.

This text only shows headings for authority to supplement procedures and a penalty for continued contravention.

Indexation must be applied to the tariff in an SPPA signed in any year after these Rules came into force, on an annual basis and as described in the Second Schedule.

Carbon credits must be provided according to the procedure set by the Clean Development Mechanism Guidelines.

Rules changes do not affect rights in already executed SPPAs, but parties may switch tariff determination within nine months and some parties may keep existing terms; late renewal or extension is not allowed in one case.

An SPP developer and an SPD must pay the regulatory levy to the Authority, following the EWURA Act and any rules made under it.

SPP developers, SPPs, SPDs, or DNOs may be fined TZS 3,000,000 if they breach these Rules and no specific penalty is set.

A person who continuously contravenes these Rules is liable to a fine of TZS 3,000,000 for each day the contravention occurs or continues.

The 2015 Electricity (Development of Small Power Projects) Rules are revoked, but orders, exemptions, and directives made under them continue in force until they are specifically revoked or otherwise expire.

If these Rules do not provide a procedure, the Authority may take necessary and lawful steps to decide the matter effectively and completely.

These Rules may be cited as the (Development of Small Power Projects) Rules, 2016.

These Rules govern regulatory and procedural matters for developing Small Power Projects in Tanzania.

This section defines key terms used in the Rules, including Authority, DNO, SPP, VSPP, and tariff-related terms.

For certain small hydro, biomass, solar, and wind projects, development must be done through an LOI with a DNO confirming the DNO can physically buy the electricity at the interconnection point.

Certain small power project developers must apply to the DNO for a LOI and submit a request containing specified project information.

A DNO must promptly notify an LOI applicant of receipt, assess completeness, ask for corrections if needed, and assign a site reference number for a complete request; the applicant must submit a corrected complete request within 14 business days after the DNO notice.

A DNO must decide an LOI request within 30 business days, publish details if it grants the request, and give written reasons if it denies the request.

An LOI normally lasts 12 months from issue. DNO must not issue another LOI for the same site during that period unless the LOI has been terminated, and DNO may extend validity by 6 months at a time up to a maximum of 18 months.

An SPP developer must get the required environmental and social clearance approvals for certain SPP projects.

A SPP developer and a DNO must identify an interconnection point under the SPP Guidelines.

An LOI for hydroelectric sites must indicate that the interconnection is exclusive to an SPP for the LOI term.

The DNO must give the SPP developer an engineering assessment and cost estimate within 30 days after issuing an LOI, unless the project is within the specified distance to the Grid substation under Rule 17.

A DNO must estimate upgrade costs if it finds an interconnection point cannot carry the proposed power, and it may require the SPP developer to pay for upgrades.

A person aggrieved by the Authority’s decision under Rule 13(6) may appeal to the Tribunal.

A DNO may set a maximum generation capacity for connection at a proposed interconnection point when an SPP developer’s proposed generation capacity exceeds 10 megawatt.

An SPP developer must submit an interconnection and electricity-sale application to the DNO within 12 months after receiving an LOI.

Projects are eligible only if, when the SPPA is signed, they are within 10 kilometers of a DNO sub-station and interconnection costs are borne by the SPP developer; the DNO also has discretion to accept or reject projects beyond that distance.

An SPP developer must bear all interconnection costs, subject to Rule 12 and Rule 13.