The Nigerian Electricity Regulatory Commission (NERC) is set to boost electricity supply to domestic customers following it’s order, mandating the System Operator (SO) to start capping power supply to international customers, which includes Benin Republic, Niger and Togo.
The SO, is a department in the Transmission Company of Nigeria (TCN).
This is amidst the high level of non-remittance of bills for electricity supplied to the countries over the years.
Recall that customers in these countries are indebted to Nigeria for N132.2 billion in electricity bills supplied to them from 2018 to the first quarter of 2023.
Under an international treaty, Nigeria sells electricity to neighbouring countries like Benin Republic, Togo, and Niger.
NERC’s 2023 Q1 report shows that the aforementioned value of electricity was sold to four firms in three countries.
The NERC explained that the non-remittance by international and bilateral customers continues a trend that should prompt the MO to invoke the provision of the market rules to curtail the payment indiscipline being exhibited by the various market participants.
However, in a NERC Order dated April 29, 2024 tagged: ‘Interim Order on Transmission System Dispatch Operations, Cross-border Supply and Related Matters’, the power sector regulator said the directive, which will last for six months in the first instance before review, takes effect from May 1, 2024.
Signed by the commission’s chairman, Sanusi Garba, and vice chairman, Musiliu Oseni,
NERC’s interim cap order on international customer capacities for six months aims to minimise impacts on domestic Gencos’ supply obligations.
Nigeria supplies a portion of the electricity it generates to some of its neighbours, including the Benin Republic, Niger Republic, and Togo.
In the order, the regulatory agency directed that power delivery to Nigeria’s neighbours must not exceed six per cent of total grid electricity at any point in time.
The electricity sector regulator stressed that following the implementation of the April 2024 supplementary order, the commission had observed sub-optimal grid dispatch operation practices.
It argued that this has compromised the Distribution Companies’ (Discos) ability to deliver on its Service Based Tariff (SBT) committed service levels to end-use customers with a significant impact on market revenues.
NERC said the system operator’s sole reliance on limiting Discos’ load off-take/allocation in managing recurring grid imbalances while prioritising international off-takers and Eligible Customers (ECs) is neither efficient nor equitable.
The practice so far adopted by the operator in managing generation availability, it said, has caused significant hardship to Discos’ customers, comprising industrial, commercial, and residential, especially during peak demands while prioritising delivery to other bilateral contracts, including export to international customers.
The commission noted that the current international and bilateral contracts with Generation Companies (Gencos) were based on best-endeavour and with loose terms that are often below the minimum contract standards currently operated in the industry.
It said many of the off-takers contracted bilaterally by Gencos often abuse this prioritisation and raise their off-takers during peak operations beyond their contracted levels at the expense of other grid users without attendant penalties for violation of grid instructions.
According to NERC, the order serves as an interim measure to guide the operations of the system operator and the TCN to implement Standard Operating Procedures (SOPs) to improve transparency and fairness of grid operations in delivering better services to all customers.
It urged the system operator to place interim caps on capacities supplied to international customers for six months from the effective date of the order, thus minimising the displacement and impact on domestic supply obligations by Gencos.
“The commission hereby orders as follows: The system operator shall develop and present to the commission for approval within seven days from the issuance of this order a pro-rata load-shedding scheme that ensures equitable adjustment to load allocation to all off-takers — Discos, international customers, and eligible customers — in the event of a drop in generation and other under-frequency related grid imbalances necessitating critical grid management.
“The system operator shall implement a framework to log and publish hourly readings and enforce necessary sanctions for violation of grid instructions and contracted nominations by off-takers in line with the grid code and market,” it stated.
Among others, it further directed that the system operator shall publish and notify all market participants and the commission of the previous day’s hourly log readings of off-take by market participants and the market settlements report by 12:00 noon of the next day.
“The system operator shall ensure that the maximum load allocation to international off-takers in each trading hour shall not be more than six per cent of the total available grid generation.
“The aggregate capacity that can be nominated by a generating plant to service international off-takers shall not be more than 10 per cent of its available generation capacity unless in exceptional circumstances a derogation is granted by the commission.
“The system operator shall henceforth cease to recognise any capacity addition in bilateral transactions between a generator and an off-taker without the express approval of the commission,” it added.
It urged the system operator and TCN to immediately initiate and install integrated Internet of Things (IoT) meters at all off-take and delivery points of eligible customers, bilateral supplies, cross-border trades, and outgoing 33kV feeders of the Discos to provide real-time visibility of aggregate offtake by grid customers.
“The installation of and streaming of data from the IOT meters should be completed within three months from the date of this order,” it added.
Meanwhile, analysis of quarterly reports produced by the NERC showed that the amount owed is from the N180.8 billion billed to the customers from which they paid N48.57 billion, representing 26.8 per cent.
The breakdown of the figure showed that Benin topped the debtors list with a bill to the tune of N72.1 billion through its Société Beninoise d’Energie Electrique (SBEE), followed by Niger Republic with N31.3 billion through its Société Nigerienne d’electricite (NIGELEC) and Togo with N10.03 billion through its Compagnie Energie Electrique Du Togo.
On a year-on-year analysis, the countries paid N650 million from the N47.25 billion given to them, while in 2019, they failed to pay any amount from the N40.6 billion.
In 2020, N10.4 billion was paid from N19.7 billion, while in 2022, they paid N32.7 billion from N52.02 billion. In Q3 2021, the companies paid N4.7 billion from the N8.76 billion bills given, while in the first quarter of 2023, the companies did not pay N12.3 billion bills.
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