February 25, 2024

DisCos deny colluding with NERC to suspend eligible customer power trade

Nigeria electricity distribution

By Akpobor Jirue, Abuja

The Association of  Nigerian Electricity Distributors (ANED), has dismissed claims that the Distribution Companies (DisCos) had pressured the Nigerian Electricity Regulatory Commission (NERC), to suspend trading of electricity under the Eligible Customer Regulation (ECR) 2017.

Referring to a report in a National  Newspaper of 16th of August, 2021, titled, ‘Investors battle electricity regulator over policy suspension’, ANED’s

Executive Director, Research & Advocacy, Barr. Sunday Oduntan said, “Whilst the concerns of the author and the stakeholders behind the publication are misplaced and unfounded, we found it compelling to set the records straight on the issues brought forward in the said publication.”

The DisCos also said they recognize the relevant provisions of the ESPRA 2005 and the ECR as well as their objectives, noting that there has been improvements in DisCos’ performance with more collaborations to increase their efficiencies , and indeed the entire value chain to achieve clean, safe and uninterrupted power supply to Nigerians.

“The Regulation is therefore a welcome initiative provided that the stakeholders comply with the laid down procedures and requirements.

“In response to the insinuation that NERC and the DisCos are colluding to frustrate the implementation of the Regulation, we wish to state unequivocally that this is untrue, unfounded, preposterous, and irresponsible of the stakeholders who have failed to meet the requirements of the Regulation and  are attempting to pass the buck.

“In fact, to fault NERC (who has been unduly lenient with them) as they have, is undermining the powers of the Commission as the regulator of the Nigerian power sector, vested with the requisite authority to ensure sanity in the Nigerian Electricity Market (NEM) and NESI as provided by the EPSRA.”

The association noted that the Eligible Customer Regulation (ECR) 2017 effective 1st November 2017, is derived from the Electric Power Sector Reform Act (EPSRA) 2005, which gives the Minister of Power the authority to declare the commencement of the Eligible Customers Regime.

The Regulation further empowers NERC to administer the regime and receive applications for eligibility customer status and to review or grant approval where conditions have been met by such applicants.

ECR states that customers using over 2 megawatts hour per hour (MWh/h) who have the NERC approval can get their electricity from the Generation Companies (GenCos), rather than through the traditional electricity market route which involved the entire electricity value chain: GenCos, Nigerian Bulk Electricity Trading PLC (NBET), Transmission Company of Nigeria (TCN) and the Distribution Companies (DisCos).

NERC confirmed in its letter to TCN on suspending the bilateral electricity trade that such customers are yet to meet requirements that include requisite energy demand, proof of excess capacity by the GenCos to supply the energy, payment of requisite charges and fees to exit conventional network, and getting eligible status from NERC.

However, the article failed to mention this as it only noted that “electricity consumers, who feel dissatisfied with the services of the DisCos in their area, can request and receive alternative electricity distribution services from any of the available Eligible Customer vendors in their area if their power requirement is over 2MW.”

Again, available records indicate that NERC has not approved any application for eligible customer status. Despite that, “These companies proceeded to arrogate the powers of NERC to themselves by vesting in themselves eligible customer status and continued the unlawful and illegal operations over the years unperturbed. The illegal and unlawful operations of these companies and the GenCos involved are direct cannibalization of the electricity market and the entire value chain,” said Oduntan.

“NERC, having duly noticed the damaging impact of these illegal “eligible customers” on the electricity market and the entire value chain, had to issue a directive with Ref. No: NERC/REG/OCFML/APPR/EC/2655/068, dated 7th July, 2021, to the Transmission Company of Nigeria (TCN) to transfer back to the Distribution Companies all electricity customers that failed to obtain eligibility status under its Eligible Customer Regulations 2017 -Regulation No. NERC 111.”

ANED also clarified that NERC has not cancelled the Regulation as claimed. “The directive is simply to stop the illegality that has been perpetrated by these unscrupulous companies and their supplier GenCo who have gone rogue for four years unchecked.”

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