NERC to Disband Boards of Discos over Poor Performance

• DisCos: No-meter-no-payment directive not for all customers
Chineme Okafor in Abuja with agency report
The Nigerian Electricity Regulatory Commission (NERC) has initiated a regulatory proceeding that may lead to the sack of the management boards of the 11 electricity distribution companies (Discos) in the country over their poor performance, its Commissioner for Engineering Performance and Monitoring, Prof. Frank Okafor, has disclosed.

Okafor said this yesterday at the 16th edition of the monthly power sector operators’ meeting which was hosted by the Niger Delta Power Holding Company (NDPHC) Limited at one of its transmission stations in Ugwuaji, Enugu State.

He explained that the regulatory commission was fed up with the operational excesses of the Discos, especially on their reported failures to abide by the performance agreements they signed with it in providing meters for electricity consumers in the country, and would in this regards initiate tough regulatory actions against them.
The commissioner noted that up till now, the Discos have failed to accomplish the terms in the metering plans they submitted to the commission.

 He added that they have rather resorted to unfair practices of estimated billing of consumers, a development it would no longer tolerate.
“There are so many challenges, I will tell you, and I will also tell you that a lot of the Discos have not done well in metering people. They committed to certain level of metering every year, but they have not done that,” said Okafor.
He further explained: “We are looking at very heavy sanction including calling off the boards of some Discos and replacing the boards. It is going to be as bad as that very soon because NERC has a right just like the Central Bank does to the banks, to sack the board and put in a new board.”

According to him, “We cannot continue to suffer like this and power as you know without it we cannot do much. If we are going to impose any sanctions, it is going to be based on the performance agreements they signed. There are also commitment they made in this meetings and some of them have not done much.”
Buttressing the commission’s conviction on the poor showings of the Discos, he stated: “Remember there was the NEMSF fund which was to beef up the metering commitment of the Discos but it doesn’t appear they are doing that and we are working to make sure that they have to do that.

“NERC developed a procedure for estimated billing, but what the Discos claim they do is definitely not what they should do and we are looking at that. The metering rates should increase tremendously, and if you must estimate, it must be reasonable because there are ways of estimating and they know but want to reap where they did not sow.”
Meanwhile, Discos yesterday said the federal government directive asking consumers yet to be metered not to pay electricity bills is applicable only to Maximum Demand (MD) customers,

The Eko Electricity Distribution Company (EKEDC) and Ikeja Electric made this known in a statement jointly signed by Heads of their Corporate Communications, Messrs Felix Ofulue and Godwin Idemudia.
The companies said residential consumers were not included in the directive issued by NERC.
They said the clarification was necessary because of a report claiming that NERC directed all consumers yet to be metered to stop paying electricity bills.

The News Agency of Nigeria (NAN) reported that maximum demand customers are commercial and industrial customers, who consume high levels of electricity and contribute substantially to the revenues of distribution companies.

However, the Minister of Power, Works, and Housing, Mr. Babatunde Fashola, yesterday stated that several millions of electricity consumers in Nigeria are being subsidised by just about six million genuine customers who are captured in records and frequently pay bills to their respective distribution companies (Discos).

Fashola said the other millions of electricity consumers in the country that do not pay their bills were engaging in electricity theft, a practice he raised the alarm over, and said had become prevalent in the country.
The minister thus called on Nigerians to adopt the ‘whistle blowing’ policy of the federal government to expose electricity consumers within their neighbourhood who consume power illegally.
He said the practice was unfair to the six millions who pay from their pockets to keep the lights on for the illegal consumers, adding that, it should be quickly nipped on the bud.

The minister stated this at the 16th edition of the monthly power sector operators’ meeting hosted by the Niger Delta Power Holding Company (NDPHC) Ltd, at one of its transmission stations in Ugwuaji, Enugu State.

He also disclosed that the N701 billion payment guarantee fund approved by the Central Bank of Nigeria (CBN) to cover for power generated by generation companies (Gencos) has kicked in, with settlement of January and February invoices taken care of.

Similarly, he noted that works on the Power Sector Recovery Programme (PSRP) which the government initiated with support from the World Bank, has been concluded but it would be presented to the National Assembly to gain their input and approval before presenting it to the public.
“I will like to speak to energy theft as a consequence also of which a few people are carrying the burden of many. Our sector currently has six million households as those who consume energy in this country.

“I have repeatedly argued that that number is grossly understated and it suggests that there is a lot of people more, may be double or triple or quadruple of that number who are using energy and are not paying for it. It then means that if people are stealing energy, the few people who we can identify become victims and bear the costs of others,” said Fashola.

He then stated: “This is my public appeal to members of the public to extend the whistle blowing policy of the federal government to those who are stealing energy. Let us know your neighbour who is stealing energy and is not paying for it because you are probably carrying his own cost. That is why your bills for areas that don’t have meters are estimated and applied to the person that the Discos don’t have on record.”

On the PSRP, he said: “The Power Sector Recovery Programme will become helpful because the more people you have trying to solve a problem, the more important it becomes that there must be a common purpose. That power sector recovery programme provides the common purpose about who should do what, when and in what ways.

“Very soon, we will finalise the details of the programme. It is already essentially ready, we are seeking to get input from the legislative arm of government who also have a stake representing their various constituents, to make their input before we present it to the public.
“Our ultimate aim is that we will translate the power sector recovery programme into three main languages and later some other languages, so that everybody understand what we are talking about because everybody have roles to play,” he added.

He said with regards to the N701 billion payment guarantee from the CBN: “I want to say that we have received payment approval for the Gencos for the month of January and February, and I believe that January has been disbursed if not completely.
“February has some numerical and clerical errors that have been corrected and very soon we should have disbursements for February and I believe they are also working on March. The invoices are sent in arrears.”