The Nigerian Electricity Regulatory Commission (NERC) has announced new penalties for electricity distribution companies (DisCos) that fail to distribute at least 95 percent of their monthly allocated energy. This move aims to safeguard electricity consumers and enhance service delivery.
In an order issued on July 5 regarding a performance monitoring framework for DisCos, NERC outlined seven key performance indicators (KPIs) against which the companies will be evaluated. These KPIs include energy off-take relative to partially contracted capacity, revenue recovery rate, adherence to the uniform system of accounts reporting, and compliance with application programming interface (API) feeder streaming.
Additional KPIs encompass compliance with the order on capping estimated bills, implementation of forum decisions, and adherence to service standards for resolving complaints received through the NERC contact centre and headquarters, according to The Cable.
NERC stated that failing to offtake up to 95 percent of available nominations in any month will result in a rectification directive. Should a DisCo fail to meet this target in two out of three months in a quarter, there will be a downward adjustment of DisCo’s guaranteed administrative operating expenses (Admin OPEX) by 5 percent for the subsequent quarter.
In cases of over-billing, 10 percent of the total over-billed amount will be deducted from DisCo’s annual Admin OPEX allowance during the next tariff review, and customers will receive credit adjustments. If the overbilled energy exceeds 20 percent of the allowed cap or affects more than 20 percent of the unmetered customer base, NERC may withdraw the Key Performance Indicator (KPI) for the Head of Billing or the officer responsible for billing in the utility.
Non-compliance in resolving complaints through the NERC contact centre or headquarters within the stipulated timelines in the Customer Protection Regulations (CPR) will result in fines. For billing issues, DisCos will be fined N10,000 per day; for disconnection issues, N2,000 per day; for interruptions, N2,000 per day; for metering delays, N1,000 per day; for connection delays, N1,000 per day; and for voltage issues, N1,000 per day.
Failure to meet targets within two months may lead to further enforcement actions, including the withdrawal of the KPI for the Head of Customer Service or the officer responsible for resolving customer complaints in the utility.
The new order took effect on July 8, 2024, and will remain in place until amended or revoked by NERC.
