NERC Imposes Strict Sanctions on Discos


The Nigerian Electricity Regulatory Commission (NERC) has rolled out tough sanctions against electricity distribution companies (DisCos) that fail to comply with regulatory requirements and provide quality service to consumers.

NERC has stated that it will reduce the administrative and operational expenditure of any DisCo that fails to offtake at least 95% of the total energy allocated to it for distribution. This is part of the commission's Order on Performance Monitoring Framework for all DisCos.

The order outlines seven key performance indicators that DisCos will be assessed on, including energy offtake, revenue recovery rate, compliance with reporting, and implementation of consumer complaint resolution. Failure to meet these targets will result in financial penalties and other enforcement actions.

For instance, if a DisCo overbills customers, 10% of the total overbilling amount will be deducted from its annual administrative and operational expenditure allowance during the next tariff review.

The commission may also withdraw the operating license of utility officials responsible for billing and customer service if they fail to resolve complaints within the stipulated timelines.

NERC stated that the sanctions are necessary to address the DisCos' inability to fully comply with previous regulatory orders, which has led to widespread customer dissatisfaction and undermined the financial sustainability of the utilities.

The commission emphasized that these interventions are not a limitation on its power to impose other enforcement actions under the Electricity Act or other regulatory instruments.

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