Babatunde Fashola, minister of power, works and housing, says the Nigerian Electricity Regulatory Commission (NERC) has the power to revoke licences of non-performing electricity distribution companies (DisCos).
Speaking at the 2019 Punuka annual lecture in Abuja, Fashola maintained that the regulatory body, not the minister, could either cancel or amend the licences of the DisCos upon consumers complaints.
The minister said the powers of NERC is applicable to all licensed authorities, including the transmission companies, generation companies, distribution companies and others under the act.
He said that state governments are also empowered under the constitution to generate, transmit and distribute electricity in areas not covered by the national grid.
“The power not to renew or to revoke operational licence of any of the authority is in sections 73 and 74 of the Act and so, there is no monopoly granted any agency unless it is endorsed on their licence,” Fashola said.
“So, there is nothing that stops the regulator from licensing another person to do the same activities within their territory as DisCo.
“If you are not serving an area well, you will get a notice that consumers in the area are not happy and you will be given a time limit to deal with the problem.
“Upon failure to address the problem, the regulator can amend your license, take the area out of your territory and license it to another person or cancel the entire license.”
The Nigerian electricity distribution sub-sector has been considered the weakest link in the value chain since privatisation of the power sector in 2013, as it has failed to live up
.….. Power sector privatization process in retrospect:
Twenty-one companies were prequalified on Wednesday to have their financial bids opened for the 10 distribution companies created from the unbundling of the Power Holding Company of Nigeria, known as PHCN.
The National Council on Privatisation, after a meeting presided over by its chairman, Vice President Namadi Sambo, approved their eligibility for the exercise billed to hold on October 10 in Abuja.
The meeting approved 10 distribution companies, code-named DISCOs, to bid for distribution in Ikeja. The companies include Honeywell, Oando, Western Consortium, Integrated Energy, Amperion Power Distribution Company Limited, Vigeo Holdings, Gumco, African Corporation AFC & CESC, Kepco/NEDC Consortium, West Power and Gas, and Rockson Engineering Limited.
In the case of Eko DISCO, six companies were pre-qualified comprising Oando, Integrated Energy, Sepco-Pacific Energy Consortium, Honeywell Energy, Kepco/NEDC, and West Power and Gas.
Three bidders, Western Consortium, Integrated and Kepco/NEDC Consortium, were approved to bid for Ibadan DISCO.
For Abuja DISCO, Kann Consortium Utility Company Limited and Interstate Electrics Limited made the cut-off mark, while four companies – Rensmart Power Limited, Proglobal Power International Consortium, Interstate Electrics Limited and Eastern Electric Nigeria Limited – were prequalified to bid for Enugu DISCO.
Aura Energy Limited made the cut-off mark to bid for Jos DISCO; Sahelian Power SPV Limited was prequalified for Kano DISCO;
Power Consortium and Rockson Engineering Limited were pre-qualified for Port Harcourt Disco; while Integrated Energy was the sole bidder pre-qualified for Yola DISCO.
Four companies were also pre-qualified to have their financial bids opened for Benin DISCO. They are: Southern Electricity Distribution Company, Rensmart Power Limited, Vigeo Power Consortium and Rockson Engineering Limited.
When we look back today at the performances of these companies almost six years after they were handed the assets they are below expectations. They attributed the challenges to policy summersault which have crippled their efforts.