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NERC: DisCos will now pay for load rejection

NERC: DisCos will now pay for load rejection
February 19
08:50 2021

The Nigerian Electricity Regulatory Commission (NERC) says power distribution companies (DisCos) will start paying for load rejections.

The key players in the industry have associated the frequent collapse of the national grid to the frequent load rejection by DisCos.

In its guidelines for implementation of economic merit order dispatch and other related matters, issued on Thursday, NERC said DisCos will be liable for the rejected loads.

The regulator said the objective of the guideline is to implement a methodology that determines and hold a DisCo financially responsible for failing to distribute its contracted load allocation due to constraints in its network.

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The NERC added that the guideline will also implement a methodology to determine and hold the Transmission Company of Nigeria (TCN) accountable for failure to deliver to a DisCo’s contracted load allocation.

“DisCos shall nominate a minimum of their load allocation based on hourly capacity declared by generating plants operating under NBET’s Power Purchase Agreements,” the guideline stated.

“Where a DisCo’s average energy offtake at the end of a monthly market settlement period is lower than its load allocation based on 6.0(c) above, the DisCo shall be liable to pay capacity charges in line with its load allocation and energy charge based on metered energy intake in the month.

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“Where it is established that a DisCo’s average energy offtake from the transmission is lower than its load allocation based on 6.0(c) above, the DisCo shall be liable to pay TCN liquidated damages (LD) based on the approved tariff (N/kWh) of TCN.

“Where a DisCo’s average energy offtake over a period of one month has exceeded its load allocation as in 6.0(c) above, the DisCo shall only be liable to pay capacity charges based on its load allocation and energy cost based on metered energy offtake in the month.”

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