A Review of the Nigerian Energy Industry

TCN demands upward review of transmission tariff

21 April 2015, Abuja – The Transmission Company of Nigeria (TCN) is requesting for  an upward review of the fees it charges for transmitting electricity from generation points to distribution points in Nigeria’s electricity supply industry.

Power2Already, TCN has applied to the Nigerian Electricity Regulatory Commission (NERC) to review its tariff upward to accommodate extant expenditure incurred by it in transmitting power.

In making the request to NERC, TCN claims that a number of significant changes have taken place or are expected within the years 2015 and 2016 since Multi Year Tariff Order (MYTO-2) were determined three years ago.

A copy of its request to NERC which was obtained in Abuja indicated that TCN’s requests for the review of its cost components came in for three of its separate but interdependent departments- the Transmission Service Provider (TSP), System Operations (SO) and the Market Operations (MO).

The request was made to cover their expenditure in areas such as network/capital expenditure component, operation and transmission losses.

Parts of TCN’s expected expenditure it was learnt include replacement and renovation of its aviation department, which it claimed was almost moribund from poor maintenance and scarcity of funds.

For instance, TCN said it plans to spend $23,294,118.00 to purchase two new helicopters (including mission role equipment and training) for monitoring the integrity and security of the 330kv/132kv network of its transmission lines.

It also plans to spend $1,811,765.00 to construct an aircraft maintenance hangar incorporating office accommodation plus workshop (hydraulic, electrics, and avionics) tools and equipment.

But by virtue of Section 76 (6) of the Electric Power Sector Reform (EPSR) Act 2005 and of all other powers enabling it to adopt the MYTO methodology for electricity pricing in Nigeria, and which sets out the basis and pricing principles and procedures for affecting minor and major review, the NERC has put out the request for consultation by industry stakeholders.

NERC has developed and published a consultation paper on TCN’s request, which will be open for comments for 28 days before in line with review processes.

The Commission by this measure, seeks to attract transparent public comment on the request, thus critiquing TCN’s request and ensuring that due process is applied in review of the tariff.

With regards to its acquisition of helicopters, TCN requires and uses helicopters to inspect its transmission lines across the country. It has in the recent past resorted to seeking help from other government agencies such as the Nigerian National Petroleum Corporation (NNPC), Nigeria Customs Service (NCS) amongst others.

– This Day

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