NERC To Sanction Discos Over Load Allocation Rejection


The Nigerian Electricity Regulatory Commission (NERC) has issued an Order imposing financial penalties on any electricity distribution company that rejects electricity allotted it bythe System Operators (SO). This is especially when there is no notification ahead of such rejection.  

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 SO.

Nigerian Electricity Supply Industry (NESI) operates on the basis of a sharing formulaapproved by NERC, which the SO uses to allocate generated electricity to the distribution companies (DISCOs), many of which are lately rejecting allocation. 

Rejection of load allocation besides causing imbalance in the system is preventing electricity consumers from realising the maximum benefit of the recent increase in the electricity 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 said, “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.

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 eliminatingimbalance and make Nigerians have maximum impact of the improvement in the generating capacity and to also incentivise operators to invest in their network to take more power

Amadi said most of the distribution and the transition companies have 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 thatresponsibility to force them to invest in their networks.”  

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