NERC to penalize DISCOs over electricity allocation rejection

SAM AMADI OF NERC

The Nigerian Electricity Regulatory Commission (NERC) has issued an order imposing financial penalties on any electricity distribution company (DISCO) that rejects electricity allotted it by the System Operators (SO) without prior notification.

In a statement released through its Head, Public Affairs, Dr. Usman Abba-Arabi, on Tuesday, the commission declared that the order number ‘NERC 139’ entitled “Order on the Imbalance Application Mechanism during the Transitional Electricity Market” was issued because of high incidence of indiscipline by electricity distribution companies who reject load allocations by the SO.

The order letter reads in part: “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.

“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.”

It adds that the Transmission Company of Nigeria (TCN) will be sanctioned if rejection of load allocation is caused by constraint in the transmission network rather than distribution network. It says the new order became effective from August 1, 2015.

NERC Chairman, Sam Amadi further explained that the new order was designed to instil discipline in the system, incentivise operators to invest in their network to take more power as well as enable consumers get value for their monies.  According to him, with the Nigerian Electricity Supply Industry (NESI) operating on the basis of a sharing formula approved by NERC, which the SO uses to allocate generated electricity to the DISCOs, rejection of load allocation, which have become common, causes imbalance in the system as well as preventing electricity consumers from realising the maximum benefit of the recent increase in the electricity generation.

By Olisemeka Obeche

[divider]

About The Author

Related posts

Please wait, while your subscription is progressing...

Subscribe to TheEconomy Newsletters & Notifications

Want to be notified when our article and news are published? Enter your email address and name below to be the first to know.