In furtherance of its regulatory obligations to electricity consumers across the country, the Nigerian Electricity Regulatory Commission (NERC) has warned the 10 electricity distribution companies in the country to either improve on their service delivery to consumers or expect some form of regulatory interventions.
The commission in a letter dated March 11, 2014 and sighted by THISDAY in Abuja, told the 10 distribution companies that it was time to bring to bear tangible electricity service delivery to consumers within their networks as they had committed to before taking over the companies from the government on November 1, 2013.
The letter was distributed to Kann Consortium for Abuja distribution company, Vigeo for Benin, West Power and Gas for Eko, NEDC/KEPCO for Ikeja, Sahelian for Kano, Integrated Energy Distribution and Marketing Company for both Ibadan and Yola distribution companies, 4Power Consortium for Port Harcourt, Interstate for Enugu and Aura Energy for Jos Distribution Company.
It was signed by the Chairman of NERC, Dr. Sam Amadi, who simply told the distribution companies that irrespective of their initial entry challenges into the Nigerian Electricity Supply Industry (NESI) and the commission’s commitment to providing a good platform for their lift-off, the time is ripe for them to deliver their service commitments to the market.
Additionally, the letter reminded them that the last three months which had gone by was enough for them to go through extant entry challenges in the sector and as such, constant complaints of poor service delivery from consumers would no longer be taken softly by it.
NERC, in this regard, reminded the distribution companies of the need to buckle up with improved investment in their distribution networks.
The letter partly read: “It has been three months since the handover of electricity utilities to private owners. You took over at a time of great expectation that with the sale of publicly owned generation and distribution assets to private sector operators, there will be discernible improvements in power supply to homes and businesses.
As you very well know, the government accepted the privatisation programme because of its confidence in the ability of the private sector to infuse finance and managerial capabilities into the electricity industry, thereby, increasing adequacy and reliability among others. You were selected as a preferred bidder because you presented the best plans for reducing Aggregate Technical Commercial and Collection (ATC&C) losses. You also presented credible financial and technical capability to meet the expectations of the power sector reform programme.”
The commission also enumerated some of its regulatory interventions in the sector to ensure a good entry for the new owners of the distribution companies to include a review of benchmarks for the ATC&C losses which will mostly lead to tariff review as well as its initiation of an interim market rule to engender confidence in the sector.
It stated that notwithstanding all these measures, the state of electricity supply has not significantly improved three months after handover of the assets to the new owners. While emphasising on the constant complaints to it by electricity consumers, NERC however stated that it recognises that there are extant challenges such as shortage in gas supply to generation companies which has affected the amount of power available for distribution and the burden of debt repayment by the new owners but that electricity consumers cannot continue to wait for tangible improvement in the sector.
It also accused the distribution companies of negligence to maintenance of key distribution equipment and facility upgrade, saying: “Our investigations show that apart from the well known problem of insufficient generation and periodic transmission failures, the failure of supply to these communities is caused more by your failure to invest in routine maintenance and facilities upgrade for the past three months since the handover.”
The letter equally conveyed the commission’s disappointment with the distribution companies’ nonchalant customer communication strategy. It thus warned that that it will not entertain any request for tariff from distribution companies that failed to meet up with established milestones.
