NERC Says DisCos Will Pay for Energy Rejection

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By Ikenna Omeje

In its commitment to address the issues of load rejection between the Electricity Distribution Companies (DisCos) and the Transmission Company of Nigeria (TCN), the Nigerian Electricity Regulatory Commission (NERC) has said that both sides would pay charges for any faults caused during load rejection.

The regulator disclosed this on Thursday  in its Guidelines for Economic Merit Order Dispatch of Generation Capacity and Related Matters 2020, signed jointly by NERC’s Chairman, Mr Sanusi Garba and Mr Dafe Akpeneye, Commissioner, Legal, Licensing and Compliance.

The document stated that DisCos would pay for capacity charge for rejecting load allocated to them due to challenges on their networks, while if the Transmission Company of Nigeria (TCN) was unable to deliver a DisCo’s load allocation, the TCN would also pay for the capacity charge.

It said the objective of the guideline is to implement a methodology that determines and hold a DisCo financially responsible for failing to distribute its contracted load allocation due to constraints in its network.

The document read in part: “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.”

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