Pursuant to section 74 of the Electric Power Sector Reform Act (EPSRA) 2005, and the terms of conditions for which the distribution licences were granted to the 8 Distribution Companies (DisCos), the power industry regulator, the Nigerian Electricity Regulatory Commission (NERC), gave a notice of intention to cancel their distribution licences for breach of licence conditions and provisions of the law.
NERC threatened to withdraw the licences of 8 out of 11 DisCos within 60 days if they don’t comply with the minimum remittance order – 8th October, 2019.
Rather than explaining and justifying in writing why their licences should not be cancelled, the 8 DisCos filed petitions challenging the minor review that led to the minimun remittance order. – 21st to 25th October, 2019.
DisCos ran to the National Assembly (NASS) to plead their cause ahead of the scheduled hearing- 24th October, 2019
Ikeja Electric, by a letter written on 18th October, 2019, exactly 3 days before filing its petition, sought audience with NERC to discuss “lasting and sustainable” resolution of the issue. Also, a week after filing its petition, Ikeja Electric withdrew its petition – 28th October, 2019.
To comply with sections 32 and 41 of the EPSRA, 2005, NERC asked that the petitions of the DisCos be heard subject to their ability to explain the reasons for their dismal performance in the last 5 years against their key performance targets.
NERC reviewed their petitions and noticed they were essentially the same apart from issues specific to each DisCo.
NERC set up a panel to hear the case of the petitioners in November 2019 – 30th October, 2019.
NERC highlighted some of the issues the petitioners were to address during the hearing including but not limited to:
■ Customer Enumeration
■ General Procurement Practices
■ Related party transactions
■ Directors’ fees and expenses
■ Technical partners
■ Material and Contigent liabilities
■ Utilisation of intervention funds received from the Federal Government
■ Efforts to date to address customer complaints and improvement of overall willingness to pay for services.
■ Analysis of capital and recurrent expenditure
■ Metering and billing of maximum demand customers and Federal Goverment owned Ministries, Department and Agencies (MDAs).
■ Payment of technical and management fees
■ Purchase and utilisation of foreign exchange
■ Remittance on market obligations from date of take over to date.
In a swift turn of event, “The Petitioners have suddenly withdrawn their petitions against NERC”.
Something is about to happen.
Will NASS order NERC to cancel the intended revocation of licences and thus weaken the power and rubbish the independence of the regulator? Or is this another stage play?
