November 5, 2024

Discos’s Tariff Charge on TCN Network is Criminal – TCN

Wants Review of TEM Order by NERC

By: Shola Akingboye

The Transmission Company of Nigeria (TCN) has berated the Transmission Electric Market (TEM) order that allows the sector’s distribution companies, the (Discos) to supply and bill 330kV/132kV customers, describing it as criminal and a violation of the tariff setting principles of the EPSRA.

The Managing Director of TCN, Mr. Mohammed Usman-Gur, made the call in Abuja on Wednesday at the public hearing on “Supplementary Order on the Transitional Stage of Electricity Market“.

TCN decried as illegal, the continuing supply of power by the 11 electricity distribution companies (Discos) in Nigeria to industries and customers who consume heavy volumes of electricity and are on the 330 and 132 kilovolt (kV) power lines.

It also provides that the Transmission Service Provider (TSP) shall cut off such off-takers who do not meet their payment obligations.

According to the TCN, the Nigerian Electricity Regulatory Commission (NERC) may have even encouraged the situation with its interim rules and other by-legislations.

The Discos, Mohammed said, do not incur any form of expenses or cost in servicing consumers within the 132kV lines, adding that such lines were maintained by the TCN and not the Discos.

“Discos billing, charging and collecting tariff from 330kV/132kV customers is a violation of the tariff setting principles of the EPSRA. Currently the 330kV/132kV customers of the Discos are being charged industrial tariffs of the Discos.

“Customers on 132kV and 330kV networks only impose costs on Gencos; transmission wheeling system; stabilisation of the grid through ancillary services; market administration. They do not in any way impose costs on the Discos,” Mohammed said in his presentation at the public hearing.

Usman further stated that, allowing the Discos to charge customers connected to 132kV and 330kV was a gross violation of EPSRA tariff setting principles, which the NERC is authorised to protect.

“132kV and 330kV customers do not impose any costs on Discos; the Discos are basically collecting revenues for services they do not provide. The best way forward is to declare all 330kV and 132kV as eligible customers in line with the EPSRA because eligible customer is the only category they fall into either in the EPSRA, Market Rules or Grid Code, and they should not be obligated to pay competition transition charges (CTC).

“There were never customers of the Discos according to definitions in the Grid Code, Market Rules and EPSRA. Discos charging them is a violation of the principles of Section 76 (2) of the EPSRA and all the 330kV and 132kV customers should pay their energy and capacity charges directly to generators who they have contracted with, while paying the Market Operator for wheeling charges, ancillary service charges, market operation charges and system operation charges,” Mohammed, noted.

In this regard, he called on the NERC to take off the Discos from the transactional arrangements relating to consumers within the 132Kv lines in the eligible consumers regulation. His claims and calls were however opposed by the Discos at the public hearing.

Meanwhile, the President, Manufacturers Association of Nigeria (MAN), Mr Mansur Ahmed, said MAN was in support of the presentation by TCN on the call for a review of the TEM order.

“We support the presentation by TCN, because we see it as an opportunity to bring about the quality of power that we are getting.

“It will bring about some improvement in the availability and quantity of power.

“We in MAN, very strongly support this presentation, we ask that NERC should look at it.

“We believe that NERC should have a target of eliminating all distortions that do not help the market and that regulations and rules should be continuously monitored.

Mr Adetunji Adeyeye, Regulatory Manager, Association of Nigerian Electricity Distributors (ANED) said the call for a review of the order by TCN would further result in an increased liquidity gap in the sector.

He said the law should be applied appropriately, noting that TCN’s call for a review of the TEM order was not possible legally.

He urged NERC to disregard the request in the interest of the entire value chain.

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