• Sunday, April 21, 2024
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FG to sanction inefficient DisCos

World Bank, AFDB partner to bring electricity to 300 million Africans by 2030

In a move aimed at addressing persistent power outages across the country, the Federal Government has announced plans to sanction Electricity Distribution Companies (DisCos) failing to meet stipulated performance standards.

In a series of posts on the power sector regulator’s official X handle, Musiliu Useni, vice chairman of the Nigerian Electricity Regulatory Commission (NERC), urged DisCos to improve their performance or suffer consequences.

Read also: NERC to deduct N10.5bn from DisCos over estimated bills

He was quoted as saying, “NERC will look at performance on a case-by-case basis. Sanctions and actions will not be the same. Ensure that you (DisCos) improve your efficiency.

“If your efficiency is at the level expected, you will get your full OPEX (operating expenditure). If you don’t perform, you will only get 50 percent of your admin OPEX.”

NERC, as the regulator of the power sector, has the power to approve the operating expenditures of DisCos and other key operators in the industry, and it has been doing this over the years.

Speaking on the operationalisation of ministries, departments and agencies centralised billing platform, Useni told his audience that this was being handled by the finance ministry.

“A payment system was put in place for critical MDAs, with an agreement for the central settlement of their electricity consumption by the Ministry of Finance, which would have access to their meter readings,” he stated.

He further noted that the sector must be run sustainably in terms of payment obligations by various operators.

“We need to ensure that sustainable payment going forward is in place. Market rules are clear, but they don’t envisage there would be tariff shortfall or subsidy,” Useni stated.

The commission stated that the meeting was expected to provide strategic direction for the NESI, review compliance since the last meeting, and give licensees a platform to discuss issues.

Also speaking at the meeting, Chidi Ike, the commissioner, engineering, performance and monitoring at NERC, said the responsibilities of licensees in the NESI shall be examined.

“We are planning to organise a comprehensive workshop for licensees to examine their responsibilities. The workshop will cover the legal framework, grid code, HSE (health, safety and environment), and everything they need to know, following which there will be sanctions for non-compliance,” he stated.

Read also: FG to sanction DisCos performing below stipulated standards

He expressed worry over the construction of houses under transmission lines and warned DisCos to desist from supplying such structures with power.

“You see swathes of communities under transmission lines. Discos supply power to them despite them being in clear contravention of the Right of Way of TCN. We are going to focus on those areas and make sure that Discos aren’t going to benefit from any form of illegality,” Ike stated.

On his part, John Joseph, the assistant general manager, engineering, performance and monitoring at NERC, highlighted the leading cause of accidents during his presentation on the health and safety performance of the NESI in 2022 and 2023.