DISCOs' Still Reject Generated Electricity Loads

Fri, May 26, 2017 | By publisher


Power

Electricity Distribution Companies ignore Nigeria Electricity Regulatory Commission warning not to reject allocated generated electricity loads

By Anayo Ezugwu  |  Jun 5, 2017 @ 01:00 GMT  |

THE electricity distribution companies, DISCOs in Nigeria have not stopped rejecting generated electricity loads despite the Nigerian Electricity Regulatory Commission, NERC, warning to them not to do so. This practice has always affected the amount of electricity loads they distribute to customers in their distribution networks.

Sunny Iroche, executive director, finance and accounts, Transmission Company of Nigeria, TCN, said the load rejection practices of the Discos often made the TCN to direct power generation companies, GENCOs, to reduce the quantum of electricity they generate.

“We do this because generation must balance utilisation and that is very important to avoid collapse of the system,” Iroche said.

The company also said that the Discos monthly financial remittances to the electricity market are still far below what is expected of them by the market, a development that is affecting the liquidity status of the market.

TCN explained that the Discos’ now remit only about 35 percent of their monthly invoices, which represents a marginal rise by five percent when compared to the 30 percent that it reported was the case in 2016.

Similarly, Moshood Saleeman, executive director, Market Operations, MO, Department, TCN, stated that they had decided to ensure that henceforth, the Discos remit what they get from the market to participants, according to the Market Rules, which stipulates 100 percent remittances of their invoices to the market.

Saleeman stated that more than three years into privatised electricity market in Nigeria, and after over two years of operating the Transitional Electricity Market, liquidity and infrastructure challenges were still holding the market from growing to its potential. He said operators in the sector must work towards harnessing the huge unutilised generation capacity, accelerate completion of critical transmission projects, reinforce and expand distribution network and deploy meters to consumers.

“These will enable the market meet the need of end-users as well as the revenue recovery for the entire value chain. Also critical for success of the market and the entire industry are issues of transparency and compliance with relevant rules/codes in the market,” Saleeman explained.

When asked whether there had been any improvement in the revenue remittances of the Discos, Saleeman stated: “We have experienced a marginal increase of about 35 per cent; we are not yet there but it is gradually improving.”

He added that due to the Discos’ failure to make the required remittances to the market, the MO was working with the Nigerian Electricity Regulatory Commission, NERC, to escrow their accounts. “Yes, aside escrowing their accounts we have other things in the pipeline that we are going to work out to ensure that the liquidity of the market is being improved upon. By the market rule, the MO has the power to escrow the accounts of Discos that have not made payments.”

This is coming as power distribution companies have also called for the implementation of a cost-reflective electricity tariff for end users as captured in the last tariff review carried out by the NERC. The Discos often argue that a cost-reflective tariff will be about N68 per kilowatt-hour, as against the N25/KWh that the largest percentages of electricity consumers across the country currently pay.

The demands of the power firms were contained in a communiqué issued at the end of the second quarter market participants/key stakeholders’ interactive forum, which was organised by the Market Operator in Abuja.

The communiqué, which was made available to journalists in Abuja on Monday and signed by the representatives of the generation and distribution firms, and the TCN, said, “Gencos called for the centralisation of market collection and appropriate disbursement based on the agreed percentages.”

Tags: