NERC Directs DisCos to Downgrade Underperforming Feeders

By Joke Kujenya

TOWARDS improving service delivery in the Nigerian electrical energy sector, the Nigerian Electricity Regulatory Commission (NERC), has instructed all distributors companies (DisCos) to automatically downgrade any Band A feeder that fails to provide a minimum of 20 hours of power supply per day for seven consecutive days.

This directive is part of the Service Delivery Commitments outlined for each DisCo in accordance with the Supplementary Order to the Multi-Year Tariff Order (MYTO) 2024, issued by NERC and effective from April 3, 2024.

Furthermore, NERC has mandated that if a DisCo does not meet the committed level of service on a Band A feeder for two consecutive days, the company must promptly publish an explanation for the failure on its website by 10.00am the is alsofollowing day.

The DisCo is also required to update affected customers on the timeline for restoring service to the committed level.

Should a DisCo fail to meet the committed service level on a Band A feeder for seven consecutive days, NERC has ordered that the feeder should be automatically downgraded to the recorded level of supply as per the applicable framework.

Additionally, each DisCo is required to establish a rapid response team to ensure efficient service delivery in line with the minimum hours of supply commitment for each service Band, starting with Band A feeders from April 3, 2024.

The recent increase in electricity tariffs for Band A customers was also announced by NERC, with rates rising from approximately N66 to N225 per kilowatt hour, marking a 240% increase.

Vice Chairman, NERC, Musliu Oseni, clarified that this tariff adjustment will impact customers receiving 20 hours or more of power supply.

The decision to raise tariffs was informed by various economic indicators, including inflation rate, exchange rate fluctuations, generation costs, transmission and administrations, as well as wholesale gas prices.

Despite these changes, NERC emphasized the importance of customer protection during this transition.

Moreover, NERC highlighted its commitment to aligning with the federal government’s subsidy realignment strategy, which aims to reduce subsidies by approximately N1.14 trillion in the 2024 fiscal year.

This approach seeks to balance the need for investors to recover operational costs while ensuring customer welfare and promoting investments in the electricity sector.

Under its regulatory mandate under the Electricity Act 2023, NERC says it will continue to review tariff applications from electricity distribution companies to ensure a fair balance between cost recovery and customer protection, noting that this thorough assessment process is designed to encourage investments that enhance service delivery and support sustainable growth in the Nigerian Electricity Supply Industry (NESI).

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