The Nigerian Electricity Regulatory Commission has expressed concern over the electricity load rejection by power distribution companies despite the blackout witnessed in many parts of Nigeria.
It threatened to enforce appropriate regulatory actions against Discos that fail to meet the key performance targets for electricity offtake, stressing that the disparity between available power capacity and customer demand was becoming large.
The power sector regulator in its latest quarterly report for Q3 2023 analysed by our correspondent on Friday, stated that the Partial Activation of Contract regime, which took effect in July 2022, defined the target volume of energy to be off-taken by Discos at any time as their Partially Contracted Capacity.
It explained that under the PAC regime, Discos had take-or-pay obligations on their PCC, meaning that they must pay for available power capacity irrespective of their offtake.
It said this structure was consistent with international best practices for long-term contract-based power procurement and ensures that power generation companies earn capacity payments to compensate them for availability.
“Considering the large disparity between available capacity and customer demand, it is expected that Discos will offtake their Partially Contracted Capacity at all times provided that the generation is available.
“However, the commission continues to observe with concern that many Discos do not take their full PCC due to a combination of technical limitations as well as load rejection by the Discos largely due to commercial reasons, i.e., high losses in certain areas,” the NERC stated.
“When there is sufficient generation capacity, every Disco will be directed by the System Operator to offtake its entire PCC.
“When generation falls below the required target, the SO prorates the available capacity among all Discos based on their respective PCCs,” the commission stated
