{"id":8183,"date":"2013-08-12T00:40:35","date_gmt":"2013-08-12T00:40:35","guid":{"rendered":"http:\/\/disnaija.com\/nigerian-newspapers\/nerc-tcn-on-collision-course-over-electricity-allocation-2\/"},"modified":"2013-08-12T00:40:35","modified_gmt":"2013-08-12T00:40:35","slug":"nerc-tcn-on-collision-course-over-electricity-allocation-2","status":"publish","type":"post","link":"https:\/\/disnaija.com\/nerc-tcn-on-collision-course-over-electricity-allocation-2\/","title":{"rendered":"NERC, TCN on collision course over electricity allocation"},"content":{"rendered":"
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\u2022 Gas scarcity reduces power supply to 2628 MWs<\/strong><\/p>\n

AN ALLEGED indiscriminate allocation of electricity in flagrant disregard for existing regulations may have set the Nigerian Electricity Regulatory Commission (NERC) and the Transmission Company of Nigeria (TCN) on the warpath. <\/p>\n

  The NERC may have accused the TCN of flouting regulations on load allocation, resulting in poor electricity supply to some consumers. Key areas affected, according to sources, are Yola and Kano.<\/p>\n

  A mid-year report from the NERC obtained by The Guardian noted that Abuja Distribution Company got 10.0 megawatts (MWs) instead of 11.5MWs as stipulated by Multi-Year Tariff Order (MYTO). Benin got 10.7MWs instead of 9.0MWs. Eko got 10.8MWs instead of 11.0MWs. Enugu got 10.8MWs instead of 9.0MWs. The zone got higher than what is stipulated for it.    Ibadan also got higher. Ibadan got 13.7MWs instead of 13.0MWs. Ikeja got 14.3MWs instead of 15.0MWs. Jos got 4.6MWs instead of 5.5MWs.  Kaduna got 6.6MWs instead of 8.0MWs.  <\/p>\n

  Kano got 3.7MWs instead of 8.0MWs. Port Harcourt got 6.5MWs, the load originally allocated to it. Yola Distribution Company got 1.6MWs instead of 3.5MWs as stipulated by MYTO. <\/p>\n

  The responsibility of the TCN is to provide access for power evacuation to all participants and ensure full evacuation capacity and reliability at minimum technical loss. It is also to ensure equitable load allocation to consumers.<\/p>\n

  The Guardian learnt that the Ministry of Power and the regulator, the NERC, are concerned that TCN has also been inconsistent with giving reports about its load allocation, in an apparent move to cover up its \u2018recklessness\u2019 in this regard. The last load allocation report TCN gave the regulator was in April, The Guardian was told.<\/p>\n

  A source said NERC had about two weeks ago summoned the management of TCN to explain why it should not be sanctioned for its departure from laid down rules.<\/p>\n

  An official said: \u201cActually, it is the lack of reporting on load allocation that worries NERC at the commission. TCN has stopped rendering reports since April.<\/p>\n

  \u201cNERC met with the System Operator (SO) at TCN on the load allocation issue. The SO\u2019s excuse is that technical difficulties at the DISCO level prevent him from following the formula. While some discos can take more, some can take less, according to him. In that case, the \u2018imbalance procedure\u2019 is implemented. Worst off are Kano and Yola.<\/p>\n

  \u201cBut I really wonder. The load allocation formula was arrived at after due consultation with all. The SO knew what every disco could take and it was reflected in MYTO 2012. Why all these distortions now? A uniform reduction across board would have made some sense, since one could blame low generation. But this is not the case. And why has the SO been so inconsistent in reporting the statistics?\u201d<\/p>\n

  Responding to an inquiry on the issue, the Chairman of NERC, Dr. Sam Amadi, confirmed that the commission was tackling TCN over the development.<\/p>\n

  Amadi told The Guardian: \u201cThere is an electricity load allocation formula in the MYTO. The formula is based on an equitable allocation of electricity to all the electricity distribution companies. This is a function of the Transmission Company of Nigeria (TCN). You are right that we are investigating the issue. It has come to our notice that this formula is not being followed and this has led to a distortion in the allocation. This means that some areas are enjoying more electricity at the expense of others. This has resulted in unreliability and dissatisfaction among customers. We will address this to restore balance and equity in electricity distribution.\u201d<\/p>\n

  Functions of the SO at TCN are grid frequency and voltage control and economic dispatch of generating units, load allocation in times of insufficient generation and co-ordination of all planned outages for the maintenance of system equipment.<\/p>\n

  Also resulting from the tariff review is a new formula for allocating centrally-generated electricity among the 11 distribution companies (Discos). <\/p>\n

  NERC is mandated by the Electric Power Sector Reform Act (EPSR Act 2005) to create, promote, and preserve efficient industry and market structures, and to ensure the optimal utilisation of resources for the provision of electricity services.<\/p>\n

  The commission developed a methodology for the allocation of the available generation capacities from the stations down to the consumers. The SO implements this methodology.<\/p>\n

  \u201cIt is important that as regulator, there is enforcement of the Act, codes, regulations and orders on fair resource sharing,\u201d a ministry official said.<\/p>\n

  Amadi said NERC had gone tough on operators and utilities on the need to obey existing rules. He said NERC would not spare any organisation that refused to operate by the rules.<\/p>\n

  He said: \u201cWhen operators fail to follow rules, it creates serious problems. The flouting of the load allocation formula is an example. An industry that is weak on rules also sends the wrong signals to investors thereby stalling the development of new projects. To this end, NERC has been meeting with critical stakeholders \u2013 generation and distribution companies, the Transmission Company of Nigeria, and the Nigerian Bulk Electricity Trading Plc to ensure that the necessary conditions for the commencement of the rule-based transitional electricity market are met. The commencement of the transitional electricity market will ensure more discipline with all entities adhering to their contractual obligations as well as all rules and regulations thereby translating to improved service delivery to electricity customers.\u201d<\/p>\n

  He went on: \u201cWe must add that the main work of the regulator in an emergent electricity market like ours is to instill confidence in investors and operators in the market.  It is such confidence that leads to the sort of investment that will ultimately improve the network and ensure reliable supply of electricity in medium to long-term period. Without enforcing rules of competitive electricity market the reform will fail.\u201d<\/p>\n

  NERC, he stressed, was committed to ensuring adequacy of electricity. <\/p>\n

  \u201cThe commission is mindful of the fact that electricity customers expect better power, better services. We are therefore working, within our ambit, to ensure the attainment of these. Without rules, investors will not come in. Without investment, electricity will not improve. Without a tariff that is cost-reflective, investors cannot sink in the huge amounts of money required to set up. It is the responsibility of NERC to ensure that rules are set and followed.\u201d<\/p>\n

  The expatriate Chief Executive Officer of TCN, Mr. Don Priestman, did not respond to an inquiry by The Guardian on the issue. Officials of the public affairs unit of TCN did not also respond to mails and phone messages on the matter. <\/p>\n

  Manitoba Hydro International (MHI) of Canada was awarded a management contract to manage TCN on behalf of the Federal Government.<\/p>\n

  The operations of TCN include the key three functions of Market Operator (MO), System Operator (SO) and Transmission Service Provider (TSP). Throughout the term of the contract, one key objective for MHI, according to its officials, would be to reorganise TCN such that the TSP becomes a separate entity from the MO and SO allowing it to become a privatised commercial company. <\/p>\n

  \u201cMHI expects to turn TCN into a technically and financially efficient, stable, and sustainable company; a company that will be market-driven and capable of utilising its maximum generation capacity and then distributing the energy throughout Nigeria 24 hours a day, 365 days a year. To do this, MHI will have to focus on developing the proficiency of local personnel.\u201d<\/p>\n

  Last March, a supervisory board was inaugurated by the Federal Government for the TCN. The board is to work with Canadian firm, Manitoba Hydro International, for the realisation of a robust grid with little or no system collapse and to actualise government\u2019s objectives of delivering quality, reliable and efficient electricity to Nigerians.<\/p>\n

  Officials said the constitution of a supervisory board for TCN was part of efforts by government to reposition the transmission company towards the attainment of the goals of the electricity reform programme of the Federal Government. The supervisory board of TCN is led by former Chairman of the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC), Hamman Tukur as chairman, with Mr. Akinsola Akinfemiwa as Vice Chairman.<\/p>\n

  At the inauguration of the board in March, Power Minister, Prof. Chinedu Nebo, described the TCN as the \u2018fulcrum\u2019 of electricity service delivery.<\/p>\n

  His words: \u201cThe Goodluck Jonathan administration recognised the need to revamp and restructure TCN to make it more efficient, commercially-viable and comparable to global transmission companies. The National Council on Privatisation (NCP) with the BPE adopted management contract strategy in line with the 2010 road-map to inject private sector expertise into the operations of TCN. <\/p>\n

  \u201cConsequently, Manitoba Hydro International of Canada was offered a three-year management contract for TCN in September 2012 after due process, to work with an in-house team and take control of the daily operations of TCN, which will include major functions such as Market Operator ( MO) and System Operator (SO), among others.\u201d<\/p>\n

  He had stressed how the expected results for the repositioning of TCN would include the following:<\/p>\n

\u2022 Reduction of electricity losses in transmission networks and systems;<\/p>\n

\u2022 Equitable and adequate generation predicated on a fair order;<\/p>\n

\u2022 Operation of a transmission system consistent with the established regulatory frame-work;<\/p>\n

\u2022 Improvement of grid security and general performance;<\/p>\n

\u2022 Provision of micro-grid for captive power nationwide;<\/p>\n

\u2022 Efficient market settlements between electricity market participants \/sellers;<\/p>\n

\u2022 Transfer of skills and expertise to Nigerian counterparts and personnel;<\/p>\n

\u2022 Efficient management of government investments;<\/p>\n

\u2022 Effective monitoring and evaluation frame-work; and <\/p>\n

\u2022 Provide yearly company report to Nigerians who are the owners of the company.<\/p>\n

  Besides, gas shortage which has plagued the nation\u2019s electricity sector for decades has posed a fresh threat to the industry.<\/p>\n

  This time, it has reduced the government\u2019s alleged improvement in electricity generation to 2626.6MW by Saturday morning.<\/p>\n

  The Ministry of Power has urged consumers to be patient with government in its efforts to stabilise the system.<\/p>\n

  The ministry said it had \u201cmoved in to arrest another crisis in the gas sector, which is affecting the power generation in parts of the country negatively.\u201d<\/p>\n

  A ministry statement said low gas supply to the generation plants had affected electricity generation and led to a major drop in supply.<\/p>\n

  Nebo was quoted by the statement as saying: \u201cAs a result of this, three power stations in the East, Afam IV, Afam VI and Rivers Independent Power Plant (IPP), were shut down again on Friday night as a result of gas constraints arising from condensate issue on TransNational Pipeline (TNP), putting total generation lost from the stations at 624MW.<\/p>\n

  \u201cOlorunsogo power station is also down due to low gas pressure as a result of which 89 megawatts of power is lost, while low head water elevation is also limiting generation at Kainji and Jebba hydro stations to one unit each.\u201d<\/p>\n

  The ministry put the total grid generation as at 6.00 a.m. on Saturday at 2628.6 megawatts.<\/p>\n

  \u201cWith this low level generation, management of the grid is currently a big task, necessitating a nationwide load,\u201d officials said.<\/p>\n

  Nebo said the ministry was assembling a crack team of experts across the oil industry to investigate in particular the cause of the severe leaks in the gas supply channels in the eastern part of the country and determine measures to be taken to ameliorate the situation.<\/p>\n

   But at a recent briefing, Petroleum Resources Minister, Mrs. Diezani Alison-Madueke, said that the volume of gas available for domestic use had increased.<\/p>\n

  She disclosed that the quantity available for domestic consumption had increased to about 1.6 billion standard cubic feet (SCF), saying that the development was attributable to the fact that gas pricing was almost at par with international market price put at $ 1.50\/1000 British Thermal Unit (BTU.)<\/p>\n

 According to her, while the electricity sector is paying $ 1\/1,000BTU, the non-electricity sector is paying $ 2\/1000BTU, adding that by next year, the average domestic price of gas would be over $ 2\/1000 BTU.<\/p>\n

  She added that the issue with the Nigeria\u2019s electricity sector was not really that of  gas supply shortages, but  that of transmission and distribution occasioned  by systems collapse, stressing how an Emergency Gas Supply Plan introduced by government in April 2012 yielded significant results. <\/p>\n

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Posted in Nigerian Newspapers. <\/a>A DisNaija.Com<\/a> network.<\/p>\n

Source: Guardian Newspaper<\/p>\n

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