Amidst Hike in Tariff, Power Generation Crashes to 3,383MW

The recent increase in electricity tariff by the Nigerian Electricity Regulatory Commission, NERC, has failed to translate to improvement in power supply as on-grid generation fell to 3,383 Mega Watts as at 3pm yesterday.

According to the National Grid data posted on the System Operator’s Grid Data Portal, it showed that as at 3pm 19 power generation plants were on the grid. Significantly, Azura Power was off-grid despite beginning the day at 434MW. Egbin Power, the nation’s largest power plant was at 325MW far below its daily average supply to the grid of about 600MW.

The NERC had in the new Multi-Year Tariff Order, MYTO 2024, which took effect on January 1, said though the tariff has been raised consumers would continue to pay the old rate while the government would pay for the gap as a subsidy amounting to N1.6 trillion in 2024.

With improved revenue, NERC ordered electricity distribution companies to off-take 3,963MW as part of their obligations for the new tariff regime.

According to the Commission, from January 1, 2024, DisCos were to “secure adequate bilateral contracts to facilitate a seamless exit from NBET’s vesting contract regime”, adding that through bilateral contracts DisCos were “required to mitigate exposures to volumetric energy risk”.

NERC stated that effective January 2024, DisCos shall have no recourse to claims revenue shortfall arising from generation shortfall, adding that DisCos are “required to continually procure additional energy volumes to serve their customers and ensure steady migration of customers to higher service bands on account of improved power supply”.

However, despite this directive, a check on DisCos’ grid energy off-take showed that the eleven DisCos had a load allocation of 3,134MW compared to the 3,963MW ordered by NERC.

Specifically, as at 3pm on Thursday, Abuja Electricity Distribution Company was allocated 501MW compared to 611MW in the new MYTO, while Ikeja Electric was allocated 533MW compared to 603MW in the new MYTO with Port Harcourt DisCo on 219MW compared to 287MW in the new tariff regime.

Reacting to the drop in power generation, the Transmission Company of Nigeria, TCN, blamed lack of gas supply to power generation companies for the situation.

A statement by TCN General Manager, Public Affairs, Ndidi Mbah stated: “There has been a gradual decrease in available generation into the grid due to gas constraints to the thermal generating companies, which has impacted the quantum of bulk power available on the transmission grid for onward transmission to the distribution load centers nationwide.

Consequent upon the current load on the grid, load distributed to the distribution load centres has also reduced, as TCN can only transmit what is generated. TCN is committed to ensuring a gradual increase in electricity supply to load centers as gas improves to power available thermal plants.”