• Monday, April 22, 2024
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NERC to revoke licenses of non-performing DisCos

NERC mandates DisCos to source 10% of power from renewables

In a move to improve power supply, the Federal Government has ordered the Nigerian Electricity Regulatory Commission (NERC) to withdraw licenses of non-performing electricity distribution companies (DISCOs).

Adebayo Adelabu, the minister of power, gave this order on Monday during a meeting with the heads of the agencies in Abuja.

He said the DisCos are not doing enough to improve supply despite the availability of power on the national grid, and the distribution segment remains the weakest link in the electricity supply value chain.

Read also: Weak transmission, DisCos’ struggles plague power sector

Adelabu said, “Distribution is our weakest point and the closest to the consumers. If we don’t get distribution right, we’re not doing anything to Nigerians. So, we need to put our efforts into this. We must intensify our efforts in ensuring that we address all issues relating to distribution”.

“It is true that the distribution companies are in the hands of the private sector. We don’t have direct control. But we need to compel them for performance. They must perform. If they do not perform, all our effort in generation and transmission is zero. I’ve also had a meeting with the Chairman of NERC on how to address these performance issues of the electricity distribution companies across the nation,” he added.

He mentioned that although they have new policies in the power sector policy framework, they still need to offer short-term solutions to the lingering crisis.

“While we have new policies in our power sector policy framework, which we’re going to finalize to address long-term issues in distribution, we must proffer short-term solutions to the lingering crisis,” Adelabu said.

“Before we get to that, we’re talking about the issue of the capitalization of the discourse, for them to inject funds, to improve infrastructure. We are talking about issues like restructuring the DisCos along state lines to make them manageable in size. Also, issuing new franchises to smaller DisCos to take over areas not being served by the existing ones or that have been underserved by the existing ones,” the minister added.

He also mentioned that DisCos that keep underperforming or not performing at all would get their license revoked.

“I’ve said it before that non-performance of DisCos in terms of epileptic power supply qualifies as a basis for revocation of license. DisCos found-wanting will be severely dealt with because their actions or inactions directly affect the sector’s performance”.

Read also: REA, EY to collaborate on sustainable energy access with states & DisCos

Adelabu also pointed out that willful refusal by any DisCo to take up available power “is a qualified basis for the revocation of licenses too”, adding that the distribution companies must be ready to pick up 90-99 percent of the load allocated to them.