Economy

Discos to Pay for Energy Rejection – NERC

Discos to Pay for Energy Rejection – NERC

Power distribution companies that reject electricity load due to constraints in their networks will now have to pay for the capacity charge of the rejected energy, the Nigerian Electricity Regulatory Commission said on Thursday.

On several occasions, power generation and transmission companies had complained that Discos were in the habit of rejecting electricity allocated to them for onward distribution to power users.

Also, the Minister of Power, Sale Mamman, had condemned the practice.

To address this, the NERC in its Guidelines for Implementation of Economic Merit Order Dispatch and Other Related Matters, obtained in Abuja on Thursday, stated that going forward, any Disco found wanting in this matter would have to pay.

It said this was in accordance with the December 2019 Minor Review of the Multi-Year Tariff Order 2015 and Minimum Remittance Order for the Year 2020.

The commission said Section 11 of the order directed that the “Nigerian Bulk Electricity Trading company shall hereafter invoice for capacity charge and energy to Discos based on their load allocation and metered energy respectively.”

It further stated that Section 12 of the order concluded that “where it is established that the Transmission Company of Nigeria 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.”

Samed Olukoya

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

Share
Published by
Samed Olukoya

Recent Posts

Discordant Tunes Greet 50% Tariff Hike As Subscribers Threaten To Sue NCC

Nigerians have expressed displeasure over the decision of the Nigerian Communications Commission to increase tariffs…

11 hours ago

Beatrice Ekweremadu Returns to Nigeria After Serving Sentence in UK

Mrs. Beatrice Ekweremadu, wife of former Deputy Senate President Senator Ike Ekweremadu, has reportedly returned…

11 hours ago

Nigeria Expands Refining Capacity with MRO Energy’s Delta State Refinery

The Federal Government has taken another step toward boosting Nigeria’s refining capacity with the approval…

11 hours ago

Eko DisCo Set for Transformation as Transgrid Enerco Signs Historic 60% Acquisition Agreement

Transgrid Enerco Limited has signed a Share Purchase Agreement (SPA) to acquire a 60% equity…

12 hours ago

Metering Gap Exceeds 7 Million Despite Multilateral Loans and Government Funds

Despite interventions by the Federal Government and multilateral lenders amounting to over N1.5 trillion, Nigeria’s…

13 hours ago

Petrol Prices Surge to N990 in Abuja, N960 in Lagos as Oil Tops $80 Per Barrel

The Nigerian National Petroleum Company Limited (NNPC) has increased the pump price of petrol at…

14 hours ago