A Review of the Nigerian Energy Industry

NERC to sanction Discos over rejection of allotted power

Power transformer.
Power transformer.

Oscarline Onwuemenyi

05 August 2015, Sweetcrude, Abuja – The Nigerian Electricity Regulatory Commission, NERC, has issued an order imposing financial penalties on any electricity distribution company that rejects electricity allotted it by the System Operators, SO.

This is coming as reports emerge that some of the distribution companies (Discos) are running away from taking on more generated electricity in the face of increased power generation, citing inadequate capacity.

The Head, Public Affairs in NERC, Dr. Usman Abba-Arabi, in a statement made available to our correspondent in Abuja, noted that the sanctions ‎would be meted especially when there is no notification ahead of such rejection.

According to hi‎m, Order number NERC 139 entitled “Order on the Imbalance Application Mechanism during the Transitional Electricity Market” was issued on account of high incidence of indiscipline by electricity distribution companies who reject load allocations by the System Operator (SO).

“The Nigerian Electricity Supply Industry, NESI, operates on the basis of a sharing formula approved by NERC, which the SO uses to allocate generated electricity to the distribution companies, many of which are lately rejecting allocation,” he stated.

NERC maintained that rejection of load allocation, besides causing imbalance in the system is preventing electricity consumers from realising the maximum benefit of the recent increase in generation.

Electricity generation in the country about two weeks ago notched 4,600 megawatts threshold.

To curb such act of indiscipline, NERC in the Order noted that, “Where a distribution company has a constraint on its network that will make it unable to receive load, the DISCO shall declare such constraint to the SO a day ahead. Where a DISCO fails to give the required notice, it will be penalised.

“Besides, every DISCO is obligated to receive load as directed by the SO, even beyond its statutorily allocated load at any time. This additional load will not attract penalty. “In allocating additional load to distribution companies, the SO shall take cognisance of historical data on Distribution Company’s ability to take power beyond their location.

“However, the Transmission Company of Nigeria will be sanctioned if rejection of load allocation is caused by constraint in the transmission network,” he said.

Giving an insight into the background of the Order which became effective over the weekend, the Commission’s Chairman, Dr. Sam Amadi, said it was aimed at eliminating imbalance and make Nigerians have maximum impact of the improvement in the generating capacity and to also sensitise operators to invest in their network to take more power.

Amadi said most of the distribution and the transition companies had been using inadequacy of electricity supply as an excuse not to strengthen their networks and “the new threshold of power generation has exposed this weakness in their networks and we (NERC) have that responsibility to force them to invest in their networks.”

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