Nigerian govt orders NERC to revoke lincences of non-performing DisCos

The Federal Government, on Monday, ordered the Nigerian Electricity Regulatory Commission (NERC) to withdraw lincences of non-performing electricity distribution companies (DisCos).

The government accused the DisCos of not doing enough to improve supply despite the availability of power on the national grid.

The Minister of Power, Adebayo Adelabu who stated this during a meeting with the head of the agencies in Abuja, said the distribution segment remains the weakest link in the electricity supply value chain.

Adelabu stressed that NERC must look for creative ways of getting the DisCos to improve supply including the imposition of stiff sanctions on utilities which fail to pick their allocations and outright cancellation of lincences.

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

“Distribution is our weakest point and it is the closest to the consumers. If we don’t get distribution right, to Nigerians, we’re not doing anything. So, efforts need to be put on this. In fact, we must intensify our efforts in ensuring that we address all issues relating to distribution.

“It is true that the distribution companies are in the hands of the private sector. We don’t have direct control. But we need to compel them for performance. They must perform. If they do not perform, all our effort in generation, in transmission is zero. I’ve also had a meeting with the Chairman of NERC on how we’re going to address these performance issues of the electricity distribution companies across the nation.

“Why we have new policies in our power sector policy framework, which we’re going to finalize to address long-term issues in distribution, we must proffer short-term solutions to the lingering crisis. Before we get to that, we’re talking about the issue of the capitalization of the discourse, for them to inject funds, to improve infrastructure.

Read also: Whitney: Lagos alleges Chrisland School violated child protection policy

“We are talking about issues of restructuring the DisCos along state lines, to make them manageable in size. Also, issuing new franchises to smaller DisCos to take over areas not being served by the existing ones or that have been underserved by the existing ones.

“I’ve said it before now that non performance of DisCos in terms of epileptic power supply qualifies as a basis for revocation of license. Any DisCo that is found-wanting will be severely dealt with because their actions or inactions directly affect the performance of the sector”, Adelabu said.

The Minister noted that wilful refusal by any DisCo to take up available power “is a qualified basis for the revocation of lincences too”, adding that the distribution companies must be ready to pick up 90-99 percent of load allocated to them.

He described the ongoing electricity rationing across the country as unacceptable, disclosing that the government plans to improve power generation from the present 4,000MW to 6,000MW in the next six months.

This, he said, would be achieved by paying off substantial debts owed to power generation companies and gas suppliers. “So what we are looking at is to have an agreement to ramp up to a minimum of 6,000 megawatts within the next three to six months. I know that the highest we ever generated was 5,700, about three years ago. That was specifically November, 2021.

“And this 5,700 was also distributed. 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.

“I’ve been to a number of the generating companies and I confirmed that they have this installed capacity. And a large percentage of this installed capacity is operational, but they are not available because of low or shortage in gas supply. Once there is gas supply, we want to ramp up generation to a minimum 6,000MW”.

Adelabu, who noted that while the Federal Government would continue to pay electricity subsidies in the short-term, said there are plans to gradually phase it out in the next three years and return the sector to a commercially driven tariff.

Speaking to journalists after the meeting, the Managing Director of the Transmission Company of Nigeria, Engr. Sule Abdulaziz explained that the fire that engulfed its substation in Kano happened while its engineers were trying to fix a leakage from one of its transformers.

He disclosed that power has been restored to most parts of the commercial city, adding that the remaining feeders would be restored before the end of Monday.

“The transformer involved was having some leakages. So our engineering team went there to work on it. They took an outage, followed all the requirements to do a maintenance job and they did it successfully.

“Now as they were putting back the transformer oil on the transformer, unfortunately, the filtering machine they were using caught fire.

“And before they could do anything, the fire had spread even to the second transformer. But thank God, with the help of the fire brigade, we were able to quench the fire”, he added.

 

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now