Government intends to impose penalties on underperforming Distribution Companies (Discos) to address outages

Date:

Power distribution companies in the Nigeria Electricity Supply Industry that fall below specified standards will face a 50% reduction in their operating expenditures, as announced by the Federal Government through the Nigerian Electricity Regulatory Commission during the 1st NESI Stakeholders Meeting of 2024 in Lagos.

The assessment of individual performances of Distribution Companies (Discos) will now be conducted on a case-by-case basis.

Nigeria has 11 power distribution companies supplying electricity to over 12 million registered users.

Despite the privatization of Discos in 2013, challenges persist, with poor liquidity and concerns about financial remittances impacting power production.

Vice Chairman of NERC, Musiliu Useni, emphasized the need for improved efficiency, stating that full operating expenditure (OPEX) would only be granted to those meeting expectations, while underperforming Discos would receive only 50% of administrative OPEX.

NERC, as the sector regulator, has the authority to approve operating expenditures and stressed the importance of sustainable payment obligations.

The meeting also addressed a centralized billing platform for Ministries, Departments, and Agencies, managed by the finance ministry.

Discussions included the need for a sustainable payment framework and highlighted plans for workshops to examine licensees’ responsibilities, with sanctions for non-compliance.

Concerns over supplying power to structures under transmission lines were raised, emphasizing the importance of adhering to safety guidelines to prevent accidents in the industry.

 

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