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The Nigerian Electricity Regulatory Commission mandates power sector distribution companies to disconnect government agencies that default in settling their electricity bills

By Anayo Ezugwu  |  Mar. 31, 2014 @ 01:00 GMT

THE Nigerian Electricity Regulatory Commission, NERC, has granted distribution companies, DISCOs, the liberty to disconnect government agencies which fail to pay their bills. Sam Amadi, chairman, NERC, stated this after the meeting of the operators of the Nigeria Electricity Supply Industry, NESI, in Abuja, on Monday, March 17. He said that circulars had been issued to the ministries, departments and agencies, MDAs in 2012, on the need to pay their electricity bills as at when due. “The federal government has already issued a circular in 2012 that government agencies should pay their bills as provided for in their budget and the accountant general is being mandated by that circular to deduct from source if after 90 days any  agency has not paid its bill.

“We want to restate that even with the DISCOs, we have communicated to them the president’s directive that they should provide meters to all government agencies. We also want to restate that because we are a new market, every agency or customer, be it public or private, will be cut off after due process because we want to make sure that the suppliers of electricity services have enough revenue to continue to supply those services. So, we want to appeal to consumers, private or public entities to pay their bills on time. Even as we are working hard to ensure that all forms of energy theft and tempering will be punished drastically, we cannot talk about improvement in this sector except we are prepared to play by rules,” he said.

Nebo
Nebo

Amadi noted that the DISCOs could cut off supply after following laid down procedures. He added that the circular mandated the office of the accountant general of the federation to deduct defaulting agency’s debts from the source after three months. He recalled that President Goodluck Jonathan had last year directed government offices to pay up the electricity bills, noting that with the private sector now in charge of the sector, government agencies and offices could no longer enjoy the privileges they were used to.

“Now, if the DISCO goes through that process they will be at liberty to cut off that consumer and NERC will sanction that such consumer should be so disconnected. And because there are some of these consumers that are in strategic sectors what we are saying is that they should now recognise this change in the power sector and they should put in place mechanisms for paying their bills as and when due.”

Meanwhile, Chinedu Nebo, minister of power, revealed at the on-going Nigeria Power Forum, Oil and Gas Conference and Exhibition in Abuja, on Monday, March 17, that more than 25 million Nigerian households do not have access to electricity and this figure translates into less than 40 percent coverage. This, according to him, is despite recent advances made in the sector with respect to the privatisation of the legacy assets of the defunct Power Holding Company of Nigeria, PHCN.

Nebo said the federal government was working hard to ensure that power penetrated remote villages and cities that had yet to benefit from adequate electricity supply. “It is, however, sad to note that despite all these advances, Nigeria still has less than 40 percent access to electricity, with more than 25 million households without access. The federal government is targeting up to 75 per cent penetration by 2020. To achieve this ambitious target, the federal ministry of power is working on a national road map on access to electricity and a comprehensive renewable energy policy, which will ensure massive connections through on-grid and off-grid solutions,” he said.

According to Nebo, the plan would require the engagement and commitment of all stakeholders in the power distribution and generation companies, development agencies, financial institutions, the Rural Electrification Agency and others. He explained that the Operation Light-up Rural Nigeria was a project to give off-grid access to communities far flung from the national grid.

The minister added that President Goodluck Jonathan had inaugurated the light-up Nigeria pilot projects at Durumi, Sape and Waru in Abuja in January 2014 and that the next plan was to replicate it in all states of the federation. Nebo, however, noted that the privatisation of the power sector would not automatically translate to an efficient electricity market as there were teething problems in the industry before it was privatised.

“This entire privatisation process is akin to changing the owner/driver of a car. The mere change of the driver, on its own, does not automatically translate to an efficient performance of the car. We must now work together to develop the emerging electricity market with a strong, responsive and yet proactive regulator and other participants meeting all obligations, including their respective business plans.”

The minister observed that the major aim of the power sector reform was for the sector to act as the catalyst for Nigeria’s economic growth. He said it was anticipated that the reform would move the country towards industrialisation, create more jobs, result in higher Gross Domestic Product, increase household income and improve the standard of living as well as improve youth development and social security.

“The main task now is to ensure that the impact of the privatisation is felt in homes and businesses all across the country. Clearly, we have moved aggressively to fully implement the road map on power. The early signs of improvement have been acknowledged but are not yet evenly felt,” he said.

The minister outlined gas supply constraints, security issues, transmission problems and revenue collection as some of the major challenges inhibiting the fulfilment of all the conditions precedent before the declaration of the Transitional Electricity Market. “As you are aware, the declaration of the TEM will automatically kick in the contractual obligations of all market participants.”

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