Legal Nigeria

Abuja Disco Fined N8bn in 18 Months07 Jul 2015Font

Abuja Electricity Distribution Company (AEDC) has paid total penalties of N8 billion to the Market Operator (MO) for imbalance electricity take from the national grid from November 2013 when the government handed over electricity assets to private investors.
AEDC in a statement from its head of public relations, Ahmed Shekarau disclosed that it has paid this much within 18 months as fine imposed on it by the MO for taking extra power from the grid to meet the demands of its customers in its franchise distribution zones.

Customers of the electricity utility cut across the States of Kogi, Nasarawa, parts of Niger and the federal capital territory, Abuja.

Shekarau said that the N8 billion was levied on it by MO, following its repeated collection of electricity beyond its allocated mark.
According to the load allocation ratio for distribution of electricity generated into the national grid, AEDC is allowed just about 11.5 per cent of whatever amount of energy that is generated daily into the national grid.
“AEDC incurred the extra cost by taking electricity beyond the 11.5 per cent allocated to it from the national grid. This resulted in the payment of the extra N8 billion referred to as imbalance penalty. The company has the capacity to distribute 1,000 megawatts as
against the less than 400 megawatts allocated to it from the national grid,” he said.
“AEDC has had to pay imbalance penalties to the tune of N8 billion from
November 1, 2013, when the current management took over to date,” he added.
It will recalled that the company was in 2014 accused by the Nigerian Electricity Regulatory Commission (NERC), former Minister of Power, Prof. Chinedu Nebo, amongst other top government officials of refusing to take up the electricity loads allocated to it, it however denied such allegations, saying that it had rather paid more fines for taking up excess loads outside of its daily allocation.
NERC had then sought to investigate such claims of Discos reluctance to take additional loads from their allocations, adding that the rejection could be from network and capacity constraints.
AEDC at that time however noted that the penalties charged by the MO for energy taken outside of their allocation were above the ceiling capacity of the company, thus putting constraint on the company to accept additional loads.
Under the Multi Year Tariff Order (MYTO), Abuja Disco gets 11.5, Benin-9, Eko-11, Enugu-9, Ibadan-13, Ikeja-15, Jos-5.5, Kaduna-8, Kano-8, Port Harcourt-6.5 and Yola-3.5 per cents of whatever is generated into the national grid daily for distribution in their respective networks