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.”