Discos Reject 10% Load Offtake as ATC&C Losses Rise 4% in Q3

Emmanuel Addeh in Abuja 

The perennial challenge of ‘load rejection’ by electricity Distribution Companies (Discos) in Nigeria continued in the third quarter of 2024, with the power distributors failing to offtake almost 10 per cent of available generation during the period.

The Nigerian Electricity Regulatory Commission (NERC) which released the data in its Quarterly Report for Q3, however stated that despite declining to evacuate the energy to Nigerian houses and businesses, it was still an improvement compared to the volume rejected previously.

Specifically, NERC put the energy offtake performance of the 12 Discos at 90.47 per cent, although it still trumped the figure for Q2 by 8.81 per cent.

Even though NERC has always threatened to enforce appropriate regulatory actions against Discos that fail to meet the key performance targets for electricity offtake, the power distribution companies have enunciated several reasons why they reject available supply despite obvious power shortages nationwide.

Some of them include: underpayment by customers; overloaded transformers, technical limitations or even transmission constraints involving a breaker issue, which may make it difficult to get enough electricity from the source to a specific location. 

To curb the problem, NERC has recently taken steps to address the load rejection challenge by Discos, including making load offtake a key metric in their Key Performance Indicators (KPIs).

“In 2024/Q3, the average energy offtake by Discos at their trading points was 3,445.13MWh/h out of the available Partially Contracted Capacity (PCC) of 3,807.98MWh/h, translating to an overall offtake performance of 90.47 per cent. 

“The energy offtake during the quarter, which was 3,445.1MWh/h, represents an increase of 8.81 per cent or 279.20MWh/h compared to the 3,165.93MWh/h recorded in 2024/Q2,” the NERC report stated.

During the period under consideration, there were 28 grid-connected power plants consisting of 19 gas, five hydro, two steam, and two gas/steam-powered plants, with the average available generation capacity of the grid-connected power plants being 5,100.90MW, the document revealed.

On a cheery note, the average available generation capacity across the grid-connected plants increased by 16.04 per cent or 705.13MW from the 4,395.77MW recorded in 2024/Q2 to 5,100.90MW in 2024/Q3.

Nineteen power plants recorded increased available generation capacities in 2024/Q3 compared to 2024/Q2, the NERC report added, with the total electricity generated in the quarter also increasing by 7.68 per cent or 674.21GWh from 8,776.55GWh in 2024/Q2 to 9,450.76GWh. 

The increase in generation during the quarter was primarily due to the rise in the available generation capacities of the grid-connected power plants compared to 2024/Q2.

Nigeria, Africa’s top economy, has struggled with a persistent power supply problem for decades as demand continues to grow, beset by lagging power generation capacity, ageing transmission infrastructure, technical issues, vandalism, lack of investment as well as partial government control of tariffs.

But the government has said it is set to boost electric power supply by 150MW before 2024 ends, stressing that having diagnosed the problems of the sector, it is strategising to solve them.

In addition, the NERC report stated that the weighted average of the Aggregate Technical, Commercial and Collection (ATC&C) loss across all the Discos in 2024/Q3 was 39.10 per cent comprising – technical and commercial loss (18.32 per cent) and collection loss (25.45 per cent). 

“The ATC&C loss increased by 4.40 per cent compared to 2024/Q2 (34.70 per cent). No DisCo achieved its target ATC&C as provided in the Multi-year Tariff Order (MYTO) during the quarter. The worst underperformance relative to the target ATC&C was recorded in Kaduna Disco, which was actual -70.84 per cent vs. target 25 per cent.

In terms of collection efficiency, the report put the total revenue collected by all Discos in 2024/Q3 at N466.69 billion out of N626.02 billion billed to customers. This, it said, translates to a collection efficiency of 74.55 per cent, representing a decrease of 4.76 per cent compared to 2024/Q2  of 79.31 per cent.

“In 2024/Q3, the cumulative upstream invoice payable by Discos was N441.67 billion, consisting of N382.90 billion for Distribution Remittance Obligation (DRO) adjusted generation costs from Nigerian Bulk Electricity Trading Plc (NBET) and N458.77 billion for transmission and administrative services by the Market Operator (MO). 

“Out of this amount, the Discos collectively remitted a total sum of N370.01 billion (N324.83 billion for NBET and N45.18 billion for MO) with an outstanding balance of N71.66 billion. This translates to a remittance performance of 83.77 per cent in 2024/Q3 compared to the 79.76 per cent recorded in 2024/Q2,” it added.

Also, in the months covering August to September, six international bilateral customers purchasing power from the grid-connected Generation Companies (Gencos) made a cumulative payment of $6.49 million against the $12.19 million invoice issued to them by the MO for services rendered in 2024/Q3. 

“Similarly, the domestic bilateral customers made a cumulative payment of N1.566 billion against the N2.1 billion invoice issued to them by the MO for services rendered in 2024/Q3,” the power sector industry regulator added.