The Nigerian Electricity Regulatory Commission (NERC) is
expected to on Saturday disclose its final decision on the status
of the licence revocation notice it issued to eight electricity
distribution companies (Discos), According to THISDAY report.
The Discos – Abuja; Benin; Enugu; Ikeja; Kaduna; Kano; Port
Harcourt; and Yola, were alleged by the NERC to have committed
various regulatory infractions.
They were in October issued notices of intention to cancel their
distribution licences by the NERC, which stated that they breached
provisions of the Electric Power Sector Reform Act (EPSRA) 2005;
terms and conditions of their respective distribution licences; and
the 2016 to 2018 minor review of the Multi Year Tariff Order (MYTO)
and Minimum Remittance Order for 2019.
NERC also stated that the Discos would have about 60 days to
appeal the order. The timeline given by the regulator for the
Discos to appeal the license revocation would however end on
December 7, and sources in the NERC informed THISDAY yesterday that
the commission was under pressure on the development.
They stated that the final decisions were known only to the
commissioners of the NERC, which in a follow up on its regulatory
order to the Discos stated that they (Discos) initially filed
petitions against the MYTO Order, but six of them subsequently
withdrew their petitions to pursue amicable resolution of the
issues.
However, one of the sources explained that the workers at the
commission were eager to see the “next chain of events starting
from December 7, 2019 because they will turn out to be another
watershed moment in the progress and development of Nigeria’s power
sector.”
The sources also explained that the workers were sceptical of
what the final decision of the commission would be, adding that
their fears stemmed from their claims that the NERC has a poor
history on enforcement actions.
According to NERC, Section 74 of the EPSRA and the terms and
conditions of Discos’ licences indicated they breached the law and
failed to remit approved minimum amounts of the sector’s revenue to
the market.
NERC said it has reasonable cause to believe that the Discos
breached the provisions of the EPSRA, terms and conditions of their
respective distribution licences, the 2016 to 2018 minor review of
the MYTO, and the minimum remittance order for 2019.
It said in October that: “The commission considers the actions
of the aforementioned Discos as manifest and flagrant breaches of
EPSRA, terms and conditions of their respective distribution
licences and the order; and therefore requires each of them to show
cause in writing within 60 days from the date of receipt of this
notice as to why their licences should not be cancelled in
accordance with section 74 of EPSRA.”
The commission said the objective of the order was to place the
Discos on a path of meeting their contractual and performance
obligations to the power market with the recognition of tariff
shortfalls arising from revenue under-recovery and the exclusion of
2017 and 2018 as years of mutual non-performance in the performance
agreement.
Putting their remittance failures under context, the NERC stated
that Abuja Discos for instance achieved just 30 per cent instead of
45 per cent minimum remittance approved for it; Benin attained 18
per cent instead of 30 per cent; Enugu achieved 10 as against 42
per cent; Ikeja did 40 as against 49 per cent, and Kano did 11
instead of 18 per cent.
Kaduna also did 24 per cent and not 33 per cent approved for it;
Port Harcourt did 10 per cent instead of 24 per cent, while Yola
remitted just 10 per cent instead of 13 per cent approved as its
minimum revenue remittance to the power market.