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DisCos Will Pay Capacity Charge For Energy Rejection – NERC

The Nigerian Electricity Regulatory Commission (NERC) has said power distribution companies that rejected electricity load due to constraints in their networks will henceforth pay for the capacity charge of the rejected energy.

The NERC stated this in its Guidelines for Economic Merit Order Dispatch of Generation Capacity and Related Matters 2020 on Thursday.

The move is to address the load rejection issues between the Electricity Distribution Companies (DisCos) and the Transmission Company of Nigeria (TCN).

The DisCos and TCN will be charged base on their respective faults in the electricity supply process.

NERC explained that 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.

DisCos Will Pay Capacity Charge For Energy Rejection - NERC
NERC

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 noted 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.”

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