THE President of Nigeria Consumer Protection Network, Kunle Kola Olubiyo, said the organisation is seeking stiffer enforcement of sanctions for erring Distribution Companies (DisCos) who failed to meet up with key performance indicators (KPI) from the electricity regulator.
Olubiyo’s suggestions follow a new order from the Nigerian Electricity Regulatory Commission (NERC) which announced that there will be new sanctions for Discos that failed to meet some contractual agreements with customers and regulators.
The contractual agreement is focused on providing a stable grid through infrastructural expansion, creating certainty in the gas-power market segment through contracting as a way of improving firm gas availability to power stations. It also focused on addressing challenges surrounding the securitisation of payments across the industry and widening the gap between peak demand and availability generation.
According to NERC, the Order on Performance Monitoring Framework for all the DisCos will affect seven issues that would be used to assess their performance.
“This includes energy off-take relative to partial contracted capacity; revenue recovery rate; compliance with reporting of a uniform system of accounts; compliance with API feeder streaming; compliance with the order on capping of estimated bills; compliance with the implementation of forum decisions; and compliance with service standards for the resolution of complaints received through the NERC contact center and NERC headquarters,” it said.
The order which was signed by NERC’s chairman, Sanusi Garba, and Commissioner Legal, Licensing & Compliance, Dafe C. Akpeneye, and made available to the media on Wednesday, July 10, added that the new order sought to hold the top management of each DisCos accountable for their compliance with reporting requirements and implementation of directives of the commission in line with the terms and conditions of the utility.
“This will drive increased operational performance from DisCos thereby improving energy delivery to customers under their franchise area,” it said.
Commenting on the order, Olubiyo said the Electricity Act had given NERC all the powers to sanction erring DisCos and set the power sector on a development trajectory.
He said there are no longer conflicts between NERC and the Bureau for Public Enterprise (BPE), which was the case before the enactment of the Electricity Act 2023, adding that Nigerians need to enjoy quality services in the sector.
“NERC now has every power to deliver and ensure the defying works. Before now, if NERC wants to check the books and reports of DisCos, it will go and get a court order. Now the Electricity Act has provided a “Quasi” judicial body to serve as an arbitrator for issues on the power sector in a court of first instance – like the Federal High Court,” he said.
Notably, the NERC order stipulated that failure to off-take up to 95 per cent of available nominations in any month will attract issuance of a rectification directive.
But the failure of any DisCo to off-take up to 95 per cent of available nominations in two of the three months in any quarter will attract a downward adjustment of DisCos guaranteed Admin OpEx by 5 per cent for the next quarter.
Also, for any instance of a customer overbilled, 10 per cent of the naira value of the total over-billing for the period will be deducted from the DisCo’s annual Admin OpEx allowance during the next tariff review, and credit adjustment for overbilled customers.
“If the energy overbilled is greater than 20 per cent of the allowed cap or the number of customers overbilled represent is greater than 20 per cent of unmetered customer base, the Commission may take other enforcement actions including the withdrawal of the KYL of the Head of Billing or the officer responsible for the billing function in the utility.
“For non-compliance to the resolution of complaints through the NERC contact centre or headquarters after the expiration of timelines in the CPR, the DisCo would be made to pay fines within the first month -billing: N10,000 per day; disconnection: N2,000/day; interruption: N2,000/day; metering: N1,000/day; delay in connection: N1,000/day; Voltage: N1,000/day,” it said.
The ICIR has earlier reported that NERC signed an agreement with the DisCos on performance improvement which would promote efficiency in the electricity market.
“A competitive market would be healthy for a regulatory market, which gives positive signals to the market,” a power sector governance expert and energy lawyer, Chuks Nwani told The ICIR.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.