FG Plans Sanctions for Underperforming DisCos

The Federal Government has unveiled plans to implement sanctions against power distribution companies (Discos) that are failing to meet specified standards in the Nigeria Electricity Supply Industry (NESI).

The announcement was made during the 1st NESI Stakeholders Meeting of 2024 in Lagos, facilitated by the Nigerian Electricity Regulatory Commission (NERC).

According to the declaration, underperforming Discos will face a significant penalty, losing 50% of their operating expenditures. This move aims to address concerns surrounding the inefficiencies and subpar performance of certain Discos within the power sector.

Officially, Nigeria hosts 11 power distribution companies responsible for supplying electricity to over 12 million registered users nationwide. These Discos were privatized in November 2013, alongside power generation companies, as part of efforts to improve efficiency and service delivery in the sector.

Despite these efforts, the power sector continues to grapple with various challenges, including liquidity issues and the persistent failure of Discos to make adequate financial contributions to sustain power production.

At the stakeholders’ meeting, Musiliu Useni, Vice Chairman of NERC, emphasized the need for Discos to enhance their performance to avoid severe consequences. He stated, “NERC will assess performance on a case-by-case basis, with varying sanctions and actions. Discos must enhance their efficiency to ensure full operating expenditure.”

Useni also addressed the operationalization of a centralized billing platform for Ministries, Departments, and Agencies (MDAs), managed by the Ministry of Finance. This platform facilitates the central settlement of electricity consumption bills for critical MDAs, ensuring efficient payment processing.

Additionally, Chidi Ike, Commissioner for Engineering, Performance, and Monitoring at NERC, outlined plans to organize a comprehensive workshop for licensees to review their responsibilities within the NESI. Non-compliance with regulations will result in sanctions, underscoring the importance of adherence to legal frameworks and safety guidelines.

During the meeting, concerns were raised regarding the construction of houses under transmission lines, posing safety hazards. Discos were warned against supplying power to such structures, with a focus on enforcing regulations to prevent illegal connections and ensure public safety.

John Joseph, Assistant General Manager at NERC, highlighted the leading causes of accidents within the NESI, emphasizing the importance of adhering to safety protocols to mitigate risks and ensure a secure operating environment.

The stakeholders’ meeting provided a platform for strategic discussions, compliance reviews, and the formulation of measures to address critical issues within the power sector, aiming to enhance efficiency, safety, and overall performance.