The Nigerian Electricity Regulatory Commission (NERC) has issued a stern warning to electricity distribution companies (DisCos), threatening sanctions if they fail to distribute at least 95% of their monthly allocated energy.
This move is part of NERC’s Order on Performance Monitoring Framework, aimed at improving the performance and accountability of DisCos.
According to the order, any DisCo that fails to meet the 95% energy off-take requirement will face a 5% reduction in its administrative and operational expenditure (Admin OpEx) for the next quarter. This is intended to ensure that DisCos fully utilize the energy allocated to them, thereby reducing the burden on electricity consumers.
NERC outlined key performance indicators (KPIs) to assess DisCos’ performance:
-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 implementation of forum decisions
-Compliance with service standards for the resolution of complaints received through the NERC Contact centre and headquarters
The commission noted that DisCos’ failure to comply with these KPIs has led to operational challenges, customer dissatisfaction, and jeopardized the financial sustainability of the utilities.
NERC’s order, signed by Chairman Sanusi Garba on July 5, 2024, stipulates various fines for non-compliance with complaint resolutions, including:
- Billing: N10,000 per day
- Disconnection: N2,000 per day
- Interruption: N2,000 per day
- Metering: N1,000 per day
- Delay in connection: N1,000 per day
- Voltage: N1,000 per day
After two months of non-compliance, NERC may take further actions, including the withdrawal of the Key Year Loss (KYL) of the responsible officer.
Regarding overbilling, NERC will deduct 10% of the total overbilled amount from the DisCo’s annual Admin OpEx allowance during the next tariff review and provide credit adjustments for overbilled customers. If overbilling exceeds 20% of the allowed cap or affects more than 20% of the unmetered customer base, NERC may enforce additional sanctions, including the withdrawal of the KYL of the head of billing.
NERC’s actions aim to enhance transparency, efficiency, and consumer satisfaction in Nigeria’s electricity sector, ensuring that DisCos adhere to their obligations and deliver reliable service to the public.