FG Directs NERC Removal of Non-Performing DISCOS's Licenses

The Nigerian Electricity Regulatory Commission has been ordered by the federal government to revoke the licenses of all non-performing electricity distribution companies in the nation.

The Nigerian Electricity Regulatory Commission (NERC) was given an order by the federal government on Monday to revoke the licenses of electricity distribution companies (DisCos) that are not operating.

The Discos were accused by the government of not doing enough to enhance supply even though electricity was available on the national grid.

The distribution segment of the electricity supply value chain continues to be the weakest link, according to Minister of Power Adebayo Adelabu, who made this claim during a meeting with the heads of the agencies in Abuja.

Adelabu emphasized that NERC needs to come up with innovative ideas to persuade the DisCos to increase supply, such as harsh penalties for utilities that don't choose their allotments and the complete cancellation of licenses.

The minister maintained that the DisCos' franchise areas were excessively broad and said the government would work toward a restructuring that would result in smaller DisCos with businesses limited to a single 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.

“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 added that the distribution companies must be prepared to pick up 90–99 percent of the load assigned to them, and that willful refusal by any DisCo to utilize available power “is a qualified basis for the revocation of lincences too.”

He declared that the current nationwide electricity rationing was intolerable and revealed that the government intended to increase power generation in the next six months from the current 4,000MW to 6,000MW.

He said that this would be accomplished by clearing sizable debts owed to gas suppliers and power generation companies. "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.”

While the Federal Government would continue to provide electricity subsidies in the near future, Adelabu stated that plans are in place to phase it out over the course of the next three years and bring the industry back to a tariff driven by commerce.

The Transmission Company of Nigeria's Managing Director, Engineer Sule Abdulaziz, told reporters following the meeting that the fire that destroyed its Kano substation started while its engineers were attempting to fix a transformer leak.

He revealed that the majority of the commercial city's feeders had their power restored, and he promised that the remaining feeders would get power 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.