NERC to penalise DisCos over low energy uptake, poor customer service

The Nigerian Electricity Regulatory Commission (NERC) has rolled out penalties against electricity distribution companies (DisCos) upon failure to take up at least 95 percent of the total monthly energy allocated for distribution.

In the commission’s order on a performance monitoring framework for all the DisCos, dated July 5, NERC introduced the penalties to protect electricity consumers.

According to the order, DisCos would be assessed against seven key performance indicators. 

They are energy off-take relative to partial contracted capacity, revenue recovery rate, compliance with reporting of a uniform system of accounts, and compliance with application programming interface (API) feeder streaming.

Others are compliance with the order on capping of estimated bills, compliance with the implementation of forum decisions, and compliance with service standards for the resolution of complaints received through the NERC contact centre and NERC headquarters.

Consequently, NERC said failure to offtake up to 95 percent of available nominations in any month will attract issuance of a rectification directive.

Also, the failure of DisCos to offtake up to 95 percent of available nominations in two of the three months in any quarter will attract “a downward adjustment of DisCos guaranteed Admin OPEX by 5 per cent for the next quarter”.

‘OVERBILLING’ 

NERC said if a customer is over-billed, 10 percent of the naira value of the total over-billing for the period will be deducted “from the DisCo’s annual Admin OpEx allowance during the next tariff review, and credit adjustment for overbilled customers”. 

“If the energy overbilled is greater than 20 per cent of the allowed cap or the number of customers overbilled represent is greater than 20 per cent of unmetered customer base, the Commission may take other enforcement actions including the withdrawal of the KYL of the Head of Billing or the officer responsible for the billing function in the utility,” NERC said. 

For non-compliance to the resolution of complaints through the NERC contact centre or headquarters after the expiration of timelines in the customer protection regulations (CPR), the DisCo would pay fines within the first month.

For billing, DisCos will pay N10,000 per day, for disconnection N2,000 a day, for interruption N2,000 a day, for metering N1,000 per day, for the delay in connection N1,000, and N1,000 per day for voltage. 

“For failure to meet targets within two months, the commission may take other enforcement actions including the withdrawal of the KYL of the Head of Customer Service or the officer responsible for resolving customer complaints in the utility,” NERC said.

According to the document, the order took effect on July 8, 2024, and will remain effective until it is amended or revoked by NERC.