FG Directs NERC to Revoke Licenses of Underperforming DISCOs


Yesterday, the Federal Government issued a directive to the Nigerian Electricity Regulatory Commission (NERC) to revoke the licenses of underperforming electricity distribution companies.

The country witnessed a 21 percent drop in power generation to 3,475MW in March 2024 from 4,404MW in the corresponding period of 2023, this decline was attributed to several challenges, including low investment and inadequate gas supply.

However, the capacity dropped from 4,043MW in February 2024 to 3,475 megawatts in March 2024 on a month-on-month basis, resulting in several Electricity Distribution Companies (DISCOs) resorting to load shedding.

According to data from the National System Operator, a unit within the Transmission Company of Nigeria, TCN, supply continues to be low, leading to negative impacts on households and businesses across the country.

The government criticized the DisCos for their lack of effort in improving supply, despite power being available on the national grid.

The Minister of Power, Adebayo Adelabu, highlighted during a meeting in Abuja with the head of the agencies that the distribution segment continues to be the weakest link in the electricity supply value chain.

Adelabu emphasized that NERC should explore creative strategies to compel DISCOs to enhance supply, including imposing strict sanctions on utilities that fail to pick up their allocations and canceling licenses altogether.

He insisted that the franchise areas covered by the DISCOs were too large, adding that the government would pursue a restructuring to create smaller DISCOs with companies restricted to one state each.

The Minister highlighted that any DISCO's willful refusal to utilize available power can lead to the revocation of licenses, emphasizing that distribution companies should be prepared to take on 90-99 percent of the allocated load.

He described the recent electricity rationing across the country as unacceptable, and announced the government's goal to boost power generation from 4,000MW to 6,000MW in the next six months.

By settling substantial debts owed to power generation companies and gas suppliers, he stated that this goal could be achieved.

He continued, “If we could achieve 5,700 at that time, I believe we still have infrastructure to generate between 6,000 and 6,500. In terms of the generating companies, I have no doubt in my mind that the existing capacity can give us 6,500 once there is stability in supply of gas.

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