NERC warns Discos against rejecting electricity from TCN

Henceforth, any distribution company (Disco) that rejects electricity from the Transmission Company of Nigeria (TCN) will be sanctioned, the Nigerian Electricity Regulatory Commission (NERC) has warned.

NERC said yesterday that “where a Disco does not take its allocation for any reason other than System Operator’s (SO) instructions, such Disco shall compensate TCN for attributable loss in revenue. On the other hand, Discos are to be compensated by the TCN for imbalance in revenue resulting from TCN’s inability to deliver allocated energy due to transmission grid constraints.

TCN had in the recent past alleged that some Discos were turning down their electricity load allocations, leading to low supply to consumers.

The Nigerian Electricity Regulatory Commission (NERC) has also harped on the sanctity of Discos’ performance agreement with the Bureau of Public Enterprises (BPE), announcing that with the new Multi Year Tariff Order (MYTO) which will take effect from February 1, distribution companies would no longer have excuses not to improve on service.
NERC has pledged to remove what it described as ‘unnecessary constraints’ to increasing access to power supply.

In an interview with The Guardian, Acting Head of NERC, Dr. Tony Akah, stressed that henceforth, all Discos and Gencos would be bound by their contractual terms for privatization. He said the regulatory and relevant agencies of government would now hold the operators accountable for contractual obligations under the Transitional Electricity Market (TEM) framework.

The Multi Year Tariff Order (MYTO 2015) as signed takes effect on February 1, 2016.
The commission has utmost respect for the National Assembly, Judiciary and other bodies and is working towards addressing all concerns. This new tariff which is based on realistic market price will improve the quality and quantity of electricity delivered to customers. It will also provide a fair return on investment for the operators. The tariff order has a robust customer protection mechanism.”

On the implication for Discos, he noted: “Discos did not have a cost reflective tariff as mandated by the EPSR Act (2005) and as required by their sales and performance agreements. Discos could not carry out necessary investment programme to improve on their network services, reduce system losses and meter all their customers. Discos were rejecting electricity (energy) supplied from generation companies through the Transmission Company of Nigeria (TCN) due to poor capacity of their networks. Discos were unable to settle market invoice in full for energy received due to tariffs being non cost- reflective.”