The Nigerian Electricity Regulatory Commission, NERC, disclosed this in its 2024 Multi-year Tariff Order, MYTO, which was recently issued to the country’s 11 DisCos.
NERC noted that the DisCos can procure electricity directly from GenCos through bilateral contracts
The regulator said the new order recognises a revision to the DisCos’ partially contracted capacity, PCC, to ensure a minimum energy offtake from January 1 2024.
Accordingly, NERC said the minimum energy offtake requirement for the 11 DisCos this year is 4,063MWh/h.
The DisCos are required “to secure adequate bilateral contracts to facilitate a seamless exit from NBET’s vesting contract regime,” it said.
NERC explained that through bilateral contracts, the DisCos are required to mitigate their “exposure to volumetric energy risks”, adding that they would have no recourse to claim revenue shortfall arising from generation shortfalls effective January 2024.
The development will end the ten-year reign of the Nigerian Bulk Electricity Trading Plc, NBET, which buys electricity in bulk from generation companies through power purchase agreements and sells through vesting contracts to the DisCos.
Ayodele Oni, an energy law expert and partner at Bloomfield Law Practice, speaking on the development, said, “With the just released 2024 Multi-Year Tariff Order for each DisCo, it would appear that DisCos are now generally allowed to procure bilateral power from generation companies, directly.
“This is in preparation for the transition of the bulk trader, NBET.”
Under the partial activation of contract, PAC regime, DisCos have take-or-pay obligations on their Partially Contracted Capacity, PCC, meaning they must pay for available capacity irrespective of their offtake.
NERC noted that the DisCos can procure electricity directly from GenCos through bilateral contracts
The regulator said the new order recognises a revision to the DisCos’ partially contracted capacity, PCC, to ensure a minimum energy offtake from January 1 2024.
Accordingly, NERC said the minimum energy offtake requirement for the 11 DisCos this year is 4,063MWh/h.
The DisCos are required “to secure adequate bilateral contracts to facilitate a seamless exit from NBET’s vesting contract regime,” it said.
NERC explained that through bilateral contracts, the DisCos are required to mitigate their “exposure to volumetric energy risks”, adding that they would have no recourse to claim revenue shortfall arising from generation shortfalls effective January 2024.
The development will end the ten-year reign of the Nigerian Bulk Electricity Trading Plc, NBET, which buys electricity in bulk from generation companies through power purchase agreements and sells through vesting contracts to the DisCos.
Ayodele Oni, an energy law expert and partner at Bloomfield Law Practice, speaking on the development, said, “With the just released 2024 Multi-Year Tariff Order for each DisCo, it would appear that DisCos are now generally allowed to procure bilateral power from generation companies, directly.
“This is in preparation for the transition of the bulk trader, NBET.”
Under the partial activation of contract, PAC regime, DisCos have take-or-pay obligations on their Partially Contracted Capacity, PCC, meaning they must pay for available capacity irrespective of their offtake.
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Ok. What does it mean and how does it affect the common man positively?
ReplyDeleteAll these plenty oyinbo na to confuse us, what we want to know is ,is light going to be cheap or what?
ReplyDeleteInvesting in the needed infrastructure wasn't cheap, maintaining it isn't cheap. Paying back loans isn't cheap. Fuel, dams, transmission hardware and software, Paying staff and taking the loss of stolen power is not cheap so how will power be cheap?
DeleteWould you remain in business if you didn't make profit or are unable to buy your needed products to sell?
I no kuku understand
ReplyDeleteHmmm, in other words BAT wants to completely finish us. It is well.
ReplyDelete