NERC to enforce 5000MW standing contract on daily electricity output – effective July 1

 Oredola  Adeola

The Nigeria Electric Regulatory Commission (NERC) has claimed that  the electricity Generation Companies (GenCos), Transmission Company Nigeria(TCN) and Distribution Companies(DisCos) have agreed to a binding contract guaranteeing the generation, transmission and distribution to scale-up power supply to an average of about 5000 megawatts of electricity daily to customers effective from July 1, 2022.

Sanusi Garba, Chairman, Nigerian Electricity Regulatory Commission (NERC), said this during a media briefing in Lagos on Wednesday.

According to him, the contract is binding on all the players across the sector’s value chain and stipulates penalties for any party that defaults on the arrangement under the new regime.

He said that Nigerians have been guaranteed the generation, transmission and distribution of an average of 5,000MW of electricity daily from July 1, 2022.

Engr. Sanusi said, “We have had discussions with the gas suppliers within our regulatory space. We have them on board to ensure that once we made the commercial requirements, gas was going to flow.

“Now, for transmission, we have heard of figures well in excess of 5,000MW and clearly TCN will be able to deliver that. I recall clearly that in March last year we had 5,400MW. So, it means it is quite possible based on signed commitments.

“All the stakeholders across the value chain had obligations and there would be consequences if they failed to deliver. So, in a situation where Gencos are able to deliver 5,000MW but TCN is unable to do so, they’ll pay the penalty to the generation company and so on.

“And whenever the power is available, and DisCos do not take the power; then they will pay liquidated damages that will compensate other market participants.

“We might not have 24/7 power supply from July 1, but Nigerians will see the trajectory because the target is to have an average of 5,000MW daily for transmission and distribution.

“The challenges of today are very clear. In the past, it used to have weak infrastructure and so on and so forth. Now we have certain external factors contributing to these events.

“Obviously, it’s not common around the world to see people coming down, pulling down transmission towers for no reason; or blowing up crude oil lines.

“In a number of instances, most of the gas we have today is associated gas and because of that when crude lines are disrupted it also affects the supply of gas to the thermal stations,” he added.

Garba also noted that plans are ongoing to commence the first phase of the National Mass Metering Programme (NMMP)at the end of August 2022, with the installations of four million meters under.

He assured that intervention of the Federal Government and Central Bank of Nigeria (CBN) would positively impact the power sector.

Rogers Shatti, NERC’s Commissioner, Finance and Management, on his part, said that the procurement process of the four million metres started earlier in 2022 with about 45 local meter manufacturers submitting bids, pointing out that the Commission is conducting a review to establish the capacities of the local meter manufacturers.

He said, “Under the phase NNMP zero of the NMMP, we discovered that some of the meter manufacturers have inflated or wrong capacities. Based on this experience, we want to ensure that any manufacturer who says he can do x number of meters in a year, we have to be sure that he can actually do that before allocations are being made.

“It is expected that the successful bids will begin to bring in CKDs and SKDs to produce meters for Nigerians. So, we are looking at the end of August to begin to see meters from our local manufacturers going to the distribution companies and of course to consumers,” he said.

Dafe Akpeneye, NERC’s Commissioner, Legal Licensing and Compliance, said discussions are ongoing with the National Assembly to introduce a new Electricity Act, saying that the Act would combat offenses of theft and non-compliance.

“The Electricity Act is a proper legal framework that will address breaches in the sector while ensuring that there is a robust platform in place to attract investment into the sector.