DisCos respond to NERC’s threat to revoke operators’ licenses

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Power distribution companies (DisCos) in Nigeria have responded to the threat of the Nigerian Electricity Regulatory Commission (NERC) to cancel the operating licences of eight firms. The threat came after there are allegations that the companies breached terms and conditions of their operations.

The distribution companies have pleaded with the electricity regulator in a letter addressed to NERC. The affected DisCos are Abuja, Benin, Enugu, Ikeja, Kaduna, Kano, Port Harcourt and Yola.

What you need to know: NERC had directed the electricity distribution companies to explain in details, why its operation licences shouldn’t be revoked after breaching the terms and conditions of their respective licences. This is 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.

DisCos’ response comes within the 60 days deadline issued by NERC for their response to the threat. NERC had threatened to revoke the license in October 2019, informing the power distribution companies that they had until December 7, 2019, to convince the regulator not to go ahead with the cancellation.

According to Sunday Oduntan, the Executive Director for Research and Advocacy of Association of Nigerian Electricity Distributors, DisCos’ umbrella body, the DisCos have done as requested by the NERC.

It was also confirmed by Punch that NERC had been meeting with the eight power distribution companies.

[READ MORE: DisCos fail to distribute 8,848.24 megawatts of electricity – TCN)

DisCos to increase electricity tariff: Meanwhile, the new electricity tariffs introduced by NERC will be effective from April 1, 2020, the power distribution companies have disclosed. The increase in price is a follow-up to the charges set in 2015. The tariff increase would cater for revenue shortfalls in the sector. The order was issued to the 11 DisCos on December 31, 2019.

The Minister of Power, Saleh Mamman, had said in a Nairametrics report that the hike was inevitable due to the rising cost of electricity generation in Nigeria. According to him, improvement in electricity supply necessitated the need to increase the electricity tariffs.