The Nigerian Electricity Regulatory Commission (NERC) and new core owners of privatised electricity distribution companies created from the unbundling of the Power Holding Company of Nigeria (PHCN) have agreed to further brainstorm on concerns expressed with the baseline Aggregate Technical, Commercial and Collection (ATC&C) loss figures contained in NERC’s Multi Year Tariff Order (MYTO-2) framework.
New owners of the distribution companies have recently asked for a review of the ATC&C loss figures projected by NERC in the tariff framework, insisting that the allowable figures were too low and do not meet existing realities in operating within the Nigerian Electricity Supply Industry (NESI). They had accordingly asked for a review of the figures to reflect the circumstances given the levels of investment proposals that are expected to be buoyed by the reduction of ATC&C losses over a five-year period in NESI.
To drive investments and expansion in the NESI, accurate data on the baseline level of losses to be reduced over the five-year period will need to be established based on which the core investors will be required to reduce. To this end, THISDAY learnt from an authoritative source that NERC and the new owners of the distribution companies have agreed to engage independent review consultants to study and make recommendations on the ATC&C loss figures, ostensibly to rectify extant differentials. According to the source, each of the distribution companies will have to engage its preferred independent consultant to study and report its findings on the ATC&C loss figure for its specific area of operation; the report will however be subjected to further verification by NERC with possibilities of adjustment as the case may be.
“You see, the disco owners have said that the baseline figures provided by NERC in the MYTO-2 do not take into consideration extant realities in operating within the NESI; they had said that the figures were quite low and need to be adjusted and that having looked closely, they realised that the loss incidents in the sector was high. NERC on its part has said over again that it is in to ensure that the sector operates optimally and will not be boxed into a corner by anybody; it has asked the disco owners to come up with a term of reference on which it will engage the consultant for same,” the source said.
Information from This Day was used in this report.