DisCos Want GenCos’ Capacity Charges Erased From Energy Invoices


Some Distribution Company (DisCo) operators have frowned over their payment of ‘capacity charges’ for investments made by Generation Companies (GenCos) in the monthly bulk energy invoices.

An investor in one of the 11 DisCos told the Daily Trust that the distribution firms are made to pay for Capital Expenditure (CAPEX) of the GenCos through the monthly bills prepared by the Nigerian Bulk Electricity Trading Plc (NBET).

He said payment for capacity charge was similar to the Fixed Charges electricity customers rejected which was used for network maintenance and captured by the Nigerian Electricity Regulatory Commission (NERC) in the Multi Year Tariff Order (MYTO).

“The same NERC should remove this capacity charge component so that our monthly energy bill will become less and easier to pay. The NBET said we often pay less than 50 per cent every month but fail to tell Nigerians that the amount we are made to pay for energy has increased tremendously,” the official said.

Corroborating this, the Managing Director/CEO of Kaduna Electric, Engineer Garba Haruna appealed to NERC and NBET to provide a level playing field to all participants in the electricity market.

A statement by the DisCo’s spokesman, Abdulazeez Abdullahi said the Engr. Haruna made the appeal when he received members of the House of Representative Committee on Power in Kaduna last Saturday.

He decried the present billing arrangement where the DisCos ‘are forced to pay capacity charges for investment made by GenCos every month, an amount which is often higher than the cost of energy supplied’.

He described the practice as unfair as it places unnecessary burden on the DisCos. “It is pertinent to note that the monthly bills submitted to DisCos by NBET consist of cost of energy supplied and capacity charges for capital investment made by the GenCos.

“Interestingly, the capacity charges are often even higher than the cost of energy which we cannot transfer to the customers. Your intervention in providing a level playing ground to all participants in the market is highly required,” he told the lawmakers.

Earlier, Chairman of the Committee, Mr. Daniel Asuquo gave the DisCo six weeks to resolve and meter all customers who paid for meters under the wound up Credited Advance Payment for Metering Initiative (CAPMI) scheme.

He also urged electricity customers to pay their bills saying “payment of electricity bills is an obligation that must be discharged at all time”.

Source: DailyTrust

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