The Nigerian Electricity Regulatory Commission (NERC) has issued a stern warning to electricity distribution companies (DisCos), threatening severe sanctions if they fail to distribute at least 95% of their monthly allocated energy.
This directive is part of NERC’s Order on Performance Monitoring Framework, aimed at improving the efficiency and reliability of electricity distribution.
According to the order, any DisCo that does not meet the 95% energy off-take requirement will face a 5% reduction in its administrative and operational expenditure for the following quarter. This measure is intended to ensure that DisCos do not commit infractions that negatively impact electricity consumers.
NERC’s framework assesses DisCos on seven key performance indicators (KPIs): energy off-take relative to partial contracted capacity, revenue recovery rate, compliance with reporting of a uniform system of accounts, compliance with API feeder streaming, compliance with the order on capping of estimated bills, compliance with the implementation of forum decisions, and compliance with service standards for resolving complaints received through NERC’s contact centers.
The commission noted that DisCos’ inability to fully adhere to these KPIs has led to operational failures, widespread customer dissatisfaction, and jeopardized their financial sustainability. NERC Chairman Sanusi Garba, in an order dated July 5, 2024, emphasized that the sanctions outlined are not exhaustive and that further enforcement actions can be taken under the Electricity Act or other regulatory instruments.
READ ALSO: Reps Order NERC to Suspend Operation of Tariff Increase
For non-compliance in resolving complaints through NERC’s contact centers, fines will be imposed: ₦10,000 per day for billing issues, ₦2,000 per day for disconnection or interruption issues, and ₦1,000 per day for metering delays, connection delays, and voltage issues. Persistent non-compliance beyond two months may lead to additional enforcement actions, including the withdrawal of the Key Performance Indicator (KYL) for the responsible officer.
NERC also addressed overbilling, stating that 10% of the naira value of total overbilling during a period will be deducted from a DisCo’s annual administrative expenditure allowance in the next tariff review.
If overbilling exceeds 20% of the allowed cap or affects more than 20% of the unmetered customer base, further actions, including the withdrawal of the responsible billing officer’s KYL, may be taken.
NERC’s periodic evaluations of DisCos’ performance against these targets aim to ensure improved service delivery and uphold market discipline within the Nigerian Electricity Supply Industry (NESI).
