People & Money

DisCos to Pay For Electricity Rejected, Says NERC

As Nigerians brace up to pay more for electricity supply, the numerous issues affecting performance of agencies along the supply value chain continue to affect optimum supply.

As part of measures to ensure adequate supply of electricity, the Nigerian Electricity Regulatory Commission has said that power distribution companies will be liable to capacity charge for failure to take their entire load allocation caused by constraints in their networks.

Earlier on Thursday, the Transmission Company of Nigeria (TCN) said that electricity distribution companies (DisCos) did not distribute up to 8, 733.39MV as of the end of August.

The poor performance of the DisCos was caused by inadequate metering, estimated billing and shortage of liquidity, it said.

Across industries and homes, reports have shown that the country needs about 6 million meters.

In the same vein, estimated billing by the Discos has dissuaded consumers from obtaining meters.

While consumers lament inadequate power, majority of the distribution companies continue to complain of shortage of liquidity to improve their distribution capacity.

Read: The generator: the must-have home accessory

Low electricity pricing has affected the return of investment and repayments of loans from banks inhibiting funding access, they said. A bad situation is also made worse by instability of forex affecting the importation of meters to be distributed.

Consumers of electricity in Nigeria usually complain about service interruptions, poor voltage, load shedding, insufficient metering, disconnections and dragged reconnection process.

As of the 11th of September, the country has the capacity to generate 12,910.40MW of electricity but struggles to generate 7,652.60MW. With transmission capacity of 8,100MW and peak generation put at 5,420.30MW, the distribution companies can only receive 3,000MW due to technical and commercial reasons.

On Thursday, NERC announced to the Discos the review of the extraordinary tariff plan application filed by them.

Last week, the Discos announced what they called “new service reflective tariff”, which took effect from September 1, 2020.

The new regime saw tariffs being charged residential consumers receiving a minimum of 12 hours of power supply rise by over 70 per cent.

NERC said Thursday that “where it is established that the TCN is unable to deliver load allocation, the TCN shall be liable to pay for the associated capacity charge.”

According to the regulator, where a Disco fails to take its entire load allocation due to constraints in its own network, it shall be liable to pay the capacity charge as allocated in its contract.

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