- NERC Gives Discos Dec 7 Deadline To Defend Cancellation Of Licences
The Nigerian Electricity Regulatory Commission (NERC) on Tuesday insisted that the power distribution companies have till December 7 to submit their written response on why their licences should not be cancelled.
NERC, in an updated document on the notice of hearing on the petitions by Discos on the Minor Review and Minimum Remittance Order, which dated November 5, 2019, also outlined additional expectations from Discos.
In October, NERC had issued a cancellation notice to eight power distribution companies, giving them an ultimatum of 60 days to respond, otherwise their respective licences would be cancelled.
The affected power distribution companies as listed by the Commission are; Abuja, Benin, Enugu, Ikeja, Kaduna, Kano, Port Harcourt and Yola.
As power distributors, they are designated revenue collection agents for the entire value chain in the industry, as they interface with end-user customers, however, they were unable to meet the minimum remittance thresholds specified in the Minor Review and Minimum Remittance Order.
According to the Commission, the Discos breached the terms and conditions of their respective distribution licences based on the provisions of Electric Power Sector Reform Act and the 2016 – 2018 Minor Review of Multi-Year Tariff Order and Minimum Remittance Order for the Year.
“The cancellation notice remains extant and the eight Discos are still required to show cause in writing within 60 days from the date of receipt thereof as to why their licences should not be cancelled in accordance with section 74 of EPSRA.
“The deadline for the submission of written response showing cause against the cancellation notice by the eight Discos is December 7, 2019.”
The commission also said it expected the eight power firms to address the issue of “optimal utilisation of resources” and “efficient operation” imposed by sections 32 and 76 of EPSRA, respectively, in their written responses to the cancellation notice.
The 8 Discos are expected to address the principles of “prudence” and “used and useful” as further justification of optimal utilisation of resources for efficient operations in the areas of general procurement practices, related party transactions, and directors’ fees and expenses.
Others include technical partners from takeover to date, material and contingent liabilities, utilisation of intervention, fund received from the Federal Government, efforts to date to address customer complaints and improvement of overall willingness to pay for services.
Giving further requirements, NERC said that the Discos must show analysis of capital and recurrent expenditure, metering and billing of maximum demand customers, metering and billing of MDAs, payments for technical and management fees, purchase and utilisation of foreign exchange and remittances on market obligations from date of takeover to date.
