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Uncertainty over Kaduna DisCo’s fate after NERC’s revocation notice expires

Experts eyes improved supply as states’ electricity market grows

Stakeholders in the electricity sector in Kaduna, and it environ, have been thrown into a state of confusion as the 60-day revocation notice issued by Nigerian Electricity Regulatory Commission (NERC) to Kaduna Electricity Distribution Company (KAEDCO), in respect of its indebtedness has expired.

The Nigeria`s electricity regulatory body-NERC, had on May 15th, 2023, announced the revocation of KAEDCO `s operational licence based on what it described as its indebtedness to the tune of N93.42 billion of unaccounted energy supplied to its area of operation.

The notice concerning the revocation of the company operational licence, was made known by Dafe Akpeneye, NERC, Commissioner in charge of Legal, Licencing, and Compliance, while briefing the press.

Subsequently, the agency, went further to published the notice in some media establishment, about some incessant irregularities perpetrated by the DisCo which flout some regulatory requirements on its financial obligations to other major players in the electricity supply value chain, such as – the Nigerian Bulk Electricity Trading (NBET), and the Market Operator (MO).

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A portion of the published noticed seen by BusinessDay reads: “Take note that KAEDCO is hereby given 60 days from the date of this notice to show cause why the electricity distribution licence should not be cancelled in accordance with section 74 of EPSRA.”

Three -months after the issuance of the notice, some players in the electricity sector in the state, are of the view that NERC might have compromised some sections of its regulations, leading its failure to exercise authority on Kaduna Electricity Distribution Company (KAEDCO), 30 days after the expiration of its threat to revoke the DisCo’s licence.

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As it is at the moment, with over 30 days after the expiration of the 60-day ultimatum by NERC, the DisCo still holds an Electricity Distribution Licence (EDL), a legal document that gives it powers to continue to carry out the electricity business in Nigeria.

This implies that the Kaduna DisCo would continue to carry out normal operations in its Licence areas of Kaduna, Kebbi, Zamfara and Sokoto states, in spite of its flagrant breaches of EPSRA and the terms and conditions of its EDL, and outright refusal to SHOW CAUSE in writing within 60 days from the date of receipt of this Notice, in accordance with section 74 of EPSRA, a source who confided information on the development, but does not want his name in print hinted.

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Also, another source, Umar Adamu, who described himself as one of the DisCo `s suppliers said that the revocation notice given by NERC to the company is already giving many of the suppliers of the company sleepless nights.

“To be very frank with you we have been left in a dark since NERC `s Commissioner, Legal, Licencing and Compliance, Mr. Dafe Akpeneye, spoke on the 15th of May, 2023, about the move to revoke the DisCo licence as a result of its indebtedness. Since then, we being waiting for further clarification about the matter, but nothing is forth coming.

“Till date, there has been no further information on the issue, but we are of much concern because some of us, who have business relationship with the DisCo, want to know the current status of the company”, Adamu stated. He said that many stakeholders in the electricity sector in the state, and it environ, are also waiting to know the outcome of the matter since the 60-day notice given by NERC, for company to repay the debt or have it operating licence revoked have expired.

Read also: NERC allows compensation claims for electricity outages

Adamu noted that the impasse and inaction by NERC, as regard the distribution company could give rise to cash collection challenges and deepen the liquidity crisis for the Disco and Nigerian Electricity Supply Industry (NESI).

Efforts made to reach the head of Corporate communication, to get the view of the management of the company on the matter did not succeed as several calls made to his telephone line, was not responded to.