The recent declaration of eligible customers will guarantee the 11 electricity distribution companies (Discos) extra loads outside their normal allocation in the Multi Year Tariff Order (MYTO) to satisfy their customers’ demands, the power generation companies (Gencos) have said.
According to the Gencos, the recently approved eligible customers’ regime, would also lift the limits placed on Discos’ potential power needs as prescribed in the MYTO.
Accordingly, the 11 Discos, on a daily basis share the total electricity generated by the Gencos on fractions dictated by the MYTO.
But speaking through their trade association – the Association of Power Generation Companies (APGC) in Abuja, the Gencos said Discos that needed extra load allocations outside the MYTO allocations would be allowed to register as eligible customers, within which additional bulk power could be channeled to them for their networks.
APGC’s Executive Secretary, Dr. Joy Ogaji, told journalists that the eligible customers’ declaration was a laudable step that could help to build competitive trading in the power market.
Ogaji explained that the declaration would also introduce a “willing seller-willing buyers” transactional system for the power market, thus increasing the market’s efficiency.
She said while the Discos were constrained to the percentage allocations assigned to them, and others getting penalised for taking more than their shares, the regime could provide them the window to take more and not get levied.
“The declaration does not in any way spell doom and gloom, Gencos can now sell power to suppressed load centres thereby making up dwindling revenue and pay their gas suppliers,” said Ogaji.
“The distribution companies on the other hand can procure additional power as eligible customers. They will be compelled to increase efficiency with sufficient attention to service improvement in the short-term by reducing the major losses incurred by them along the power chain,” she added.
“Customers now have the permission to cooperate amongst themselves, providing the enabling environment and also infrastructure to be classified as eligible customers. This means investing in the right infrastructure such as metering, power lines, transformers and electrical switchgears. The declaration portends several benefits for the sector as it will also address some of the liquidity and revenue shortfall in the sector as guaranteed cash flow will definitely boost the morale for potential investors in the area of gas field development, power generation capacity and also in the manufacturing industry with assurance of constant power supply to meet production demand,” she explained.
Source: Nigeria Today