The Nigerian Electricity Regulatory Commission (NERC) has revealed that power distributors grappled with a substantial average load rejection in the second quarter of 2023, despite the nation’s persistently low power supply. According to NERC’s latest report for the 2023 Second Quarter, the power distributors declined an average of 114.53 megawatt-hours per hour of electricity during this period.
In addition to the load rejection, the report also highlighted that power distributors managed to install 178,864 new meters for consumers during the same quarter.
However, there was a significant increase in complaints from power users, which surged by approximately 31 percent. The rise in grievances was attributed to persistent mechanical faults and gas supply constraints that hampered power generation in Q2.
NERC’s data indicated that all 11 power distribution companies in Nigeria accepted less electricity than their contracted capacities, resulting in an average cumulative load rejection of 114.53 MWh/h. This load rejection occurred amid power outages that affected numerous locations across the country.
Throughout the three-month period, the collective average energy offtake of the 11 Discos amounted to 3,251.31 MWh/h, while their available partially contracted capacity stood at 3,365.84 MWh/h.
NERC clarified the energy offtake performance by explaining that since July 2022, when the Nigeria Electricity Supply Industry transitioned to the Partial Activation of Contract regime, the target volume of energy to be offtaken by Discos had been defined as their partially contracted capacity.
Under the PAC regime, Discos had take-or-pay obligations related to their PCC, obliging them to pay for available capacity, regardless of their actual energy offtake. These findings shed light on the complex challenges faced by power distributors in the ever-evolving Nigerian energy landscape.
“This structure is consistent with international best practices for long-term contract-based power procurement and ensures that Gencos (generation companies) earn capacity payments to compensate them for availability.
“To curtail this practice, the commission included load offtake as a key metric in its KPI Order—Order on Performance Monitoring Framework (NERC/316-326/2022), which was issued to Discos effective October 2022.
“The order provides that persistent load non-offtake to certain thresholds may trigger regulatory actions against the management of the Discos,” the NERC stated.
It added that “in 2023/Q2, the average energy off-take by Discos at their trading points was 3,251.31 MWh/h, and it shows a decrease of -218.82 MWh/h (-6.31 percent) when compared to 3,470.13 MWh/h off-take in 2023/Q1.
“During the quarter, all the Discos took less than their available PCC except Eko Disco, which recorded an offtake performance of 116.90 percent and will therefore benefit from reduced wholesale energy costs.”
Nevertheless, the commission has made it clear that it intends to employ its performance monitoring framework to implement regulatory measures against distribution companies (discos) falling short of their Key Performance Indicator (KPI) targets for electricity offtake.
Regarding metering, the report disclosed that a total of 178,864 meters were deployed during the second quarter of 2023, marking a 2.04 percent increase when compared to the 175,281 meters installed in the first quarter of 2023.
It stated, “During the quarter, 168,397 meters were installed under the MAP (Meter Asset Provider) framework, while 9,302 meters were installed under the NMMP (National Mass Metering Programme) framework.
“The vendor and Disco Financed framework recorded 1,143 and 22 meter installations, respectively.”
As of June 30, 2023, there were a total of 12,561,049 registered electricity customers, with 5,546,483 of them, or 44.16 percent, having been provided with meters. Notably, Ikeja, Ibadan, Abuja, and Enugu Discos led in meter installations during the second quarter of 2023, contributing to 72.69 percent of the total installations.
In terms of customer complaints, NERC reported a significant increase, with a total of 325,898 complaints received in the second quarter of 2023 across all Discos. This figure marked a substantial rise of 30.52 percent, translating to 76,215 more complaints compared to the 249,683 received in the first quarter of 2023.
Ibadan Disco registered the highest number of complaints, with 55,110 complaints, accounting for 16.91 percent of the total complaints, whereas Yola Disco had the fewest complaints, with only 2,662, making up just 0.82 percent of the total complaints received, according to the regulator’s report.