Nigerian Government Accuses DISCOs of Frustrating NERC

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Nigerian government accuses the electricity distribution companies in the country of frustrating Nigerian Electricity Regulatory Commission from doing its work

By Anayo Ezugwu  |  Dec 12, 2016 @ 01:00 GMT  |

BABATUNDE Fashola, minister of power, works and housing, has accused 11 electricity distribution companies, Discos, in Nigeria of being stumbling blocks to the smooth regulation of the power sector by the Nigerian Electricity Regulatory Commission, NERC. He also said the Discos were largely responsible for the delay in the settlement of debts owed them by federal government agencies that consumed electricity without paying.

Inaugurating a transmission line built under the National Integrated Power Projects, NIPP, by the Niger Delta Power Holding Company, NDPHC, in Akwa Ibom State, recently, Fashola said there were instances where the Discos have by their actions impinged on NERC’s regulatory responsibilities. The minister made the allegation on the back of repeated media advertisements and promotions by the Discos in which they consistently absolved themselves of the failings of the sector.

He specifically noted that the Discos have irrespective of their excuses, failed to also tell Nigerians that they have mostly refused to submit their annual statement of accounts to the NERC as required by the reform law. They have also frustrated attempts by NERC to activate their pacts in the Transitional Electricity Market, TEM, which should bind them to objective service delivery.

Fashola added that these actions have negative impact on the progress of the sector. In the past three years, the Discos have refused to submit their audited financial reports to NERC, and when the commission wanted to activate their contractual obligations as contained in the TEM, they dragged it to court and frustrated its efforts.

“Advert should also have told the Nigerian public how many Discos have gone to court to frustrate the attempt by NERC to hold them to their contracts so that they can pay the Gencos who have been sacrificing, the gas producers who have not received payment and who have continued to act patriotic.

“It is important to remind all of us that the privatisation exercise that transferred the distribution companies was not held as a contract with an association. It was between Nigeria and the distribution company. So, while I respect the right of an association, the constitution guarantee the freedom of association, the federal government will not pay over N100 billion to anyone under the aegis of an association. That is not how to solve it.”

Fashola stated that with regards to the debt claims of the Discos, the government would treat them individually upon its honest verification of their claims and not with their association, adding that his request for them to submit records of their claims have been largely rebuffed by the Discos.

“We won’t pay estimate. The figure must remain clear in naira and kobo terms. And we will do our work. I think that the advert that the Discos issued should also have conveyed information to the Nigerian public about how many of them have supplied details of their audited accounts for the last three years. And we have been asking them to provide it,” he explained.

Regarding operational difficulties experienced by the Discos, Fashola said: “Those Discos who cannot run the business must be honest with themselves now and begin to look for options either to raise capitals, to get more strategic partners in or to do whatever they consider appropriate within the framework of their contract in order to get on with this job.”

The Discos have insisted debts by the federal government ministries, departments and agencies, MDAs, are affecting their operations,. The figure comprised N39.1 billion pre-privatisation of electricity assets and N39.5 post-privatisations. Also thrown into the debt calculation is the outstanding interest of N15 billion, which the Bulk Trader charges Discos for late payment of their electricity bills, which was worsened by the non-settlement of electricity bills by consumers as and when due.

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