Power Generation Companies (GenCos) have decried the huge burden they bear as the Distribution Companies (DisCos) sustain energy rejection, only paying for the quantity they wish to take daily.
The Executive Secretary of the Association of Power Generation Companies (APGC), Dr Joy Ogaji in a statement also accused the Nigerian Electricity Regulatory Commission (NERC) of complicity.
He said prior to 2015, the Generation Companies (GenCos) make their declaration of how much they can generate (Available Capacity) daily and the System Operator (SO) nominates the capacity for transmission.
“In every Electricity Market, this nominated capacity is paid for and with consideration for the suppressed capacity as prompted by SO’s instructions; a reasonable return on capital invested in the business is a critical incentive for continued improvement in technical capacity as well as quality of service,” she explained.
However, APGC said in 2015 when the regulator – NERC in preparing for the Transition Electricity Market (TEM), “came up with the obnoxious new capacity definition entrenched in the enabling TEM Supplementary Order No. NERC/15/0011 dated 18th March, 2015.”
Dr Ogaji said the new NERC rule meant that GenCos can only be paid for what the system could take and not what GenCos are willing and available to sell.
“The Regulator, NERC, went on to direct that the Metered Energy be converted into capacity for billing.
“This regulatory directive, on a monthly basis, brings down the actual billable mobilized GenCos capacity, leading to the DisCos billed less.
“It is believed that this reduction of capacity during billing was instigated by the DisCos and the Regulator approved of it,” she alleged.
APGC also reacted to a claim by DisCos that the GenCos over bill them as the Energy Sent Out had consistently fallen short of the Multi Year Tariff Order 2015 generation assumptions governing their operation and service delivery.
It said the current state of the market, where a generation company is short-changed for the benefit of other market participant negates the tenets of the MYTO.
Asking NERC to address this, APGC said: “What incentives does the market hold for GenCos to invest towards recovery of unavailable capacity when they are denied capacity payment for what is already provided and maintained but not called up.”