Nigerian Electricity Regulatory Commission (NERC) has said it would henceforth sanction the Transmission Company of Nigeria (TCN) each time it under-delivers power, and electricity distribution companies (DisCos) whenever they reject power allocated to them.
This move is expected to end the bitter blame game between both parties.
In documents containing the official communication between NERC and two major DisCos (Eko and Ikeja Discos), which detailed the reviewed rules, the regulator said any rejection of power by the DisCos or under-supply by the TCN would now attract a “capacity charge”.
TCN has always complained that the country’s power supply situation is worsening because of the rejection of electricity allocation by DisCos, claiming that the problem persisted because the electricity distributors can drop load and increase it at will without being penalised.
But NERC, in the official communication document obtained by BusinessDay, said, “Where it is established that the TCN is unable to deliver DisCos’ load allocation, TCN shall be liable to pay for associated capacity charge. Where DisCo fail to take its entire load allocation due to constraints in its network, the DisCo shall be liable to pay capacity charge as allocated in its vesting contracts.”
DisCos are already hiking electricity rates due to a combination of factors such as higher inflation, higher interest rate, among others, as a three-month tariff hike implementation begins on Tuesday.
NERC had recently approved tariff hike but said the DisCos must consult with customers first, and that the hike would not affect consumers who do not get 12-hour power supply daily for a month.
According to the schedule for Ikeja DisCo, NERC said, “Following consultations and directions on tariff policy, the Commission (NERC) hereby approves a deferment of the applicable tariffs for customers in service band D and E (that is, customers with a service commitment of less than an average of 12 hours supply per day over a period of one month) for the period 1st September 2020 to 1st January 2021.”
Residential customers under the Ikeja DisCo have been grouped into R2SP and R2TP paying N21.30 and N21.80 per kilowatt hour (kwh), respectively, starting September 1.
In a similar NERC Tariff Order for Eko DisCo, it grouped the customers according to A to E with the C to E customers having 12-hour supply down to four hours daily, and charged the DisCo not to hike tariff for those below 12-hour power daily supply.
Abuja DisCo and Kaduna DisCo also said they have started implementing the new electricity tariff across their franchise areas from September 1.
James Momoh, chairman of NERC, last Wednesday hinted that the new model being implemented from Tuesday is the Service-Based Tariff (SBT).
BusinessDay learnt that the four DisCos which had submitted their amended Performance Improvement Plans (PIP) to NERC for approval as basis to raise their rates were the ones granted approval, just as other DisCos would take a cue within the month.
