NERC Moves against Discos’ Discretionary Remittance to Power Market

* Directs refund of monies customers paid for voluntary metering scheme

Chineme Okafor in Abuja

The Nigerian Electricity Regulatory Commission (NERC) has said that reported decisions of electricity distribution companies (Discos) in Nigeria’s power market to collect financial proceeds from their sale of electricity to consumers in the country but turn around to remit whatever amount they liked to the power market is wrong and discouraging investments in the sector.

To this end, the commission has indicated that it would push to bring an end to such discretionary remittance. It also said it would move to implement a settlement system that would be open to all parties in the market.

NERC, which is the regulator of Nigeria’s electricity market, stated this in a communique of a regulatory meeting it had with operators of the Discos in Abuja. The communique was however sent to THISDAY on Monday.

In it, the commission acknowledged there are discrepancies in the cut off dates for payments made to the Nigerian Bulk Electricity Trading Plc (NBET) by the Discos, and the need to implement a settlement system visible to all parties.

It equally explained that there was a need to remove discretionary payments by the Discos, adding that it was unsustainable and could dampen investors’ confidence in the industry.

According to the communiqué, the meeting was the first that NERC’s chair, Prof. James Momoh, would have with the Discos since he took up his appointment as the commission’s chief executive officer.

It added that it focused on identifying, discussing and finding practical solutions to critical issues facing the country’s electricity market.

Going further, it explained the commission also took a fresh decision on the now rested Credited Advanced Payment for Metering Implementation (CAPMI) scheme – a voluntary meter acquisition scheme which allowed consumers to advance payments to Discos for meter acquisition and installation in exchange for proportionate power supplies to them over a period of time.

NERC, in this regard, directed Discos to refund to consumers all monies collected from them for meters that were not installed to them within the scheme.

“The meeting re-emphasised need to uphold customer service standards especially as it relates to refund of monies collected from customers for meters under the scrapped CAPMI scheme. The Discos were directed to publish a reminder in any two national newspapers that customers who paid for CAMPI yet unmetered should come for refund with details of payment,” said the communique.

NERC equally asked the Discos to explore the options of smart metering technologies to cut down incidences of electricity theft in their distribution networks, as well as resolved that Discos would have to adopt its regulation on estimated metering in their valuation of tariff of their estimated customers.

For the N72 billion the federal government pledged to invest in the Discos to upgrade their networks and which the Discos have kicked against through their umbrella association — the Association of Nigerian Electricity Distributors (ANED) — NERC said it would be clearly structured. It thus advised the Discos to accept and make the most of the intervention fund.

Turning to the Discos’ association — ANED — NERC said it would no longer recognise the association as a representative of the Discos, and warned it to desist from interfering in any of its policy statements on the sector.

“Inter-relationships between electricity distribution companies were encouraged but activities of Association of Nigerian Electricity Distributors were discouraged. A strict adherence to contract agreement signed by the commission’s licensees (Discos) was re-echoed as the only binding legal entity that should form the continued relationship between the commission and electricity distribution companies.

“The meeting agreed henceforth the legal counsel of the electricity distribution companies representing ANED should never in whatsoever way interfere with the policy directives or regulatory pronouncements made either by the minister of power or the commission. That no unwarranted remark should be made by ANED representatives against the person of the minister, NERC chairman or against any of the NERC commissioners going forward,” the communique added.