The Nigerian Electricity Regulatory Commission is likely to review its policy on allocation of electricity load to distribution companies

|  By Anayo Ezugwu  |  Jul 24, 2017 @ 01:00 GMT  |

THE Nigerian Electricity Regulatory Commission, NERC, may review its practice of allocating maximum generated quantity of electricity on percentage basis to the distribution companies, Discos. The minutes of the last power sectors’ operators meeting held in Enugu, explained that NERC may review this practice to allow the Discos take as much generated electricity as their networks can take.

Under the Multi Year Tariff Order, MYTO load allocation, the 11 Discos share the total volume of power generated by the generation companies, Gencos, on a ratio based on their customer base. The load allocation formula is contained in the MYTO, which guides the sector.

It has, however, resulted in controversies bothering on load rejection by some of the Discos, as well as insufficient quantity of power allocated to Discos that need more than their normal allocations. Also, there were claims of financial penalties levied on Discos who take more than their approved daily percentage in the electricity generated by the Gencos.

The planned review also followed the government’s recent declaration of eligible customers’ regulation in which Gencos are allowed to sell electricity generated by them directly to large users with minimal interference from the Discos. “NERC is to develop and issue an order that would allow Discos to draw more than their MYTO percentage allocation when there is un-utilised power available on the grid and supply it to their customers or eligible customers,” said the minutes of the meeting.

Similarly, NERC also told the operators at the meeting that it had developed a draft law to deal with theft of electricity in the country. The draft law, it explained, will be reviewed by other stakeholders in the sector for their inputs.

Frank Okafor, commissioner for engineering standards and safety, NERC, stated at the meeting that the commission had developed the draft energy theft law and forwarded to Louis Edozien, permanent secretary at the ministry of power, for onward transmission to BabatundeFashola minister of power, works and housing.

Also in the minutes of the meeting was a disclosure by the Market Operator, MO, department of the Transmission Company of Nigeria, TCN, that the Niger Delta Power Holding Company Limited, NDPHC, has enlisted all of its 10 Gencos as market participants in the power sector. The MO equally reported that the payment performance of the market to service providers was still poor, and indicated that Abuja and Kaduna Discos have commenced their registrations as market participants.

Meanwhile, at a two-day stakeholders’ meeting on basic education and electricity in Lagos, Frank Jacobs, president, Manufacturers Association of Nigeria, MAN, said the regulatory framework for the NERC makes the body very powerful, but the system is yet to work. He said the challenges bedevilling NERC have made electricity more expensive for manufacturers who spend 40 percent of their cost of production on power supply.

He said the huge spending on power supply by manufacturers in Nigeria was higher than that of Ghana, where manufacturers deploy about 20 percent and those in China and Europe who spend less than 10 percent on power supply.

Joy Ogaji, executive secretary, Association of Power Generation Companies, APGC, blamed the inconsistencies in the sector on the clear lack of coordination. She argued that the various government authorities are compromising the independence of NERC.

On his part, Azu Obiaya, chief executive officer, Association of Nigerian Electricity Distributors, ANED, charged the participants to reflect on the humongous cost of investment that can guarantee electric power supply. “Risk is assigned where it is best borne. The consistency we hope to achieve in the sector will cost money. Someone has to pay. There is a need for Nigeria to decide whether it wants to keep electricity as a social service or fully privatise it,” Obiaya said.