Lagos, Feb. 18, 2021 – The Nigerian Electricity Regulatory Commission (NERC) says Electricity Distribution Companies (DisCos) will be liable to pay capacity charge for rejecting load allocated to them due to constraints on their networks.
The regulatory agency also said where it was established that the Transmission Company of Nigeria (TCN) was unable to deliver a DisCo’s load allocation; the TCN would be liable to pay for the associated capacity charge.
NERC made this known in its “Guidelines for Economic Merit Order Dispatch of Generation Capacity and Related Matters 2020”, posted on its website on Thursday.
The News Agency of Nigeria (NAN) reports that the document, dated Feb. 15, 2021, was signed jointly by NERC’s Chairman, Mr Sanusi Garba and Mr Dafe Akpeneye, Commissioner, Legal, Licensing and Compliance.
The document seeks to provide guidance on the procedures for implementing Economic Merit Order Dispatch as provided for in the December 2019 Minor Review Order and subsequent Tariff Orders.
According to the document, there is need for implementation of a framework for the settlement of imbalance between the 11 DisCos and the TCN.
It said: “Section 10(c) of the Order states that “the Commission shall hold the TCN responsible for deviations from the economic merit dispatch order that adversely impact the base weighted average cost of wholesale of energy.
”Section 11 of the Order further directs that “Nigerian Bulk Electricity Trading Company shall hereafter invoice for capacity charge and energy to DisCos based on their load allocation and metered energy respectively.
”Additionally, Section 12 of the Order concludes that “where it is established that TCN is unable to deliver a DisCo’s load allocation, TCN shall be liable to pay for the associated capacity charge.
“Where a DisCo fails to take its entire load allocation due to constraints in its network, the DisCo shall be liable to pay the capacity charge as allocated in its Vesting Contract.”
NAN reports that according to data released by the TCN, a total of 363.77MW of electricity allocated to the DisCos from Feb. 1 to Feb. 7 was unutilised.