GenCos Seeks NERC Capture of Stranded 2,000 Megawatts as Available Capacity

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The debate over the about 2,000MW of energy said to have been rejected by Electricity Distribution Companies (DISCOs) came up Monday at a two day stakeholders’ consultation forum in Abuja, as the electricity Generation Companies (GenCos) urged the Nigeria Electricity Regulatory Commission (NERC) to classify it as part of the available generation capacity in the Nigerian Electricity Supply Industry (NESI).

With generation capacity considered as one of the criteria for review of tariff, according to a presentation on the review of the Multi-Year Tariff Order (MYTO) methodology by Senior Manager, Market and Rate, Abbah Tera, the DISCOs made a case that the fact that the stranded capacity was not utilized did not translate to mean that it was not produced.

Represented by the Executive Secretary, Association of Power Generation Companies (APGC), Mrs. Joy Ogaji, she said that the GenCos should not suffer owing to the stranded power.

“We are not saying we don’t have enough generation. The only constraint that Nigeria is having is the cost of gas. We have over 2,000MW sitting. The over 2,000Mw should be treated, it is available. GenCos should not suffer for it. In line with the review NERC should capture the stranded capacity,” she said.

There was also a case for the Transmission Company of Nigeria (TCN) to be privatized since it was obvious that the Federal Government, its operator had proven inefficient.

In his view, the Commissioner of Engineering Performance and Monitoring, Prof. Frank Okafor explained that the cost of funding the transmission network was too enormous for a private company to raise for the operation of the system, saying, “It will be difficult to get investors that will fund the TCN.”

He said the government was borrowing from multilateral financial agencies to expand the grid since the amount of power delivery was not sufficient to raise the required revenue.

In view of the rising level of stranded generation, NERC said that Minister of Power, Works and Housing, Babatunde Fashola had directed it to sell power to eligible customers, and that it had gotten the go ahead to enact a regulation that will encourage willing seller and willing buyer of electricity.

The NERC chief noted out that the forumwas not for a tariff increase, but to get stakeholders’ inputs on how often the frequency of its review.

 

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