TCN: Discos Reject Generated Electricity Loads Allocated to Them

Chineme Okafor in Abuja

The Transmission Company of Nigeria (TCN) has disclosed that the 11 electricity distribution companies (Discos) have not stopped the practice of rejecting generated electricity loads allocated and sent to them for onward distribution to customers in their distribution networks.

The company also said that the Discos monthly financial remittances to the electricity market are still far below what is expected of them by the market, a development it said is affecting the liquidity status of the market.

TCN explained that the Discos’ now remit only about 35 per cent of their monthly invoices, which represents a marginal rise by five per cent when compared to the 30 per cent that it reported was the case in 2016.

The Executive Director, Finance and Accounts, TCN, Mr. Sunny Iroche, told journalists on the sidelines of a recent market participants workshop in Abuja that the load rejection practices of the Discos often made the TCN to direct power generation companies (Gencos) to reduce the quantum of electricity they generate.

“We do this because generation must balance utilisation and that is very important to avoid collapse of the system,” Iroche said.

Similarly, the Executive Director, Market Operations (MO) Department of the TCN, Mr. Moshood Saleeman, stated that the MO had decided to ensure that henceforth, the Discos remit what they get from the market to participants, according to the Market Rules, which stipulates 100 per cent remittances of their invoices to the market.

Saleeman stated that more than three years into privatised electricity market in Nigeria, and after over two years of operating the Transitional Electricity Market, liquidity and infrastructure challenges were still holding the market from growing to its potential.

He said operators in the sector must work towards harnessing the huge unutilised generation capacity, accelerate completion of critical transmission projects, reinforce and expand distribution network and deploy meters to consumers.

“These will enable the market meet the need of end-users as well as the revenue recovery for the entire value chain. Also critical for success of the market and the entire industry are issues of transparency and compliance with relevant rules/codes in the market,” Saleeman explained.

When asked whether there had been any improvement in the revenue remittances of the Discos, Saleeman stated: “We have experienced a marginal increase of about 35 per cent; we are not yet there but it is gradually improving.”

He added that due to the Discos’ failure to make the required remittances to the market, the MO was working with the Nigerian Electricity Regulatory Commission (NERC) to escrow their accounts.

“Yes, aside escrowing their accounts we have other things in the pipeline that we are going to work out to ensure that the liquidity of the market is being improved upon. By the market rule, the MO has the power to escrow the accounts of Discos that have not made payments,” he added.