A Review of the Nigerian Energy Industry

NERC faults Discos on claims of incremental improvements

30 December 2 2014, Abuja – An evidence-based assessment of the operational performance of the 11 electricity distribution companies by the Nigerian Electricity Regulatory Commission (NERC) indicates that claims of incremental improvements made by some of the leading electricity distribution companies in their respective coverage zones are actually far from the reality.

Power.electricityThe assessment by the regulator shows that contrary to general expectations, some of the distribution companies that had performed creditably well before they were privatised by the government late in 2013, were found to have done badly in their respective responsibilities to the new electricity market.

The distribution companies were assessed on their level of compliance to statutory revenue remittance to the market, response to consumer issues, investments in expansion of network facilities and provision of metering facilities to consumer to reduce extant loss levels and ensure transparency in market transactions.

Chairman of NERC, Dr. Sam Amadi, said in an interview recently in Abuja that the assessment indicated a contrary development with what some of the hitherto leading distribution companies like Ikeja and Abuja electricity distribution companies have constantly brandished as their achievements in market since its privatisation.

Amadi noted that against expectations, distribution companies such as Yola and Enugu distribution companies that were initially adjudged to be letdowns following their poor showings before the privatisation, have suddenly made good showings in most of the key performance indicators that they were assessed on.

“From the empirical evidence we have, it is actually not true that electricity has done worse from takeover, some of the operators have done fairly well; Ibadan disco is fairly doing well in terms of grappling with the challenges, surprisingly, Yola from indicators that used to be the whipping boy has done well and it is also noteworthy that both discos are owned by the same people and they are doing well; financially, they are doing more than most discos,” Amadi said.

He further noted that: “If you look at metering now, Ibadan is doing well but Benin claims to be the best but our evidence does not support that claim. Eko has tried, Ikeja has surprisingly fallen short of standard, before now, it used to do well but the new guys there are not doing well in terms of dealing with consumers and market settlement and so there are mixed grill of discos performances.”

On the performance of Port Harcourt, Abuja and Enugu distribution companies, Amadi stated that: “Port Harcourt is trying to set up good forum offices and IT-based processes, they started late although. Abuja is not doing well and need to work harder even financially in terms of market obligations, Enugu surprisingly has the best business plan, and they come out better than everybody in terms of financials and during the acquisitions, they made the right calculations as to what will happen in the market and so didn’t make any commitment to improvements in the first year.

They said in their business plan that they will not make any commitment to improvement in the first year and didn’t commit to loss reduction in the first year, this has proved to be a much more realistic plan than everybody else has and so those who did their planning were apt because they rightly did not commit to improvement in the first year and this has made them come out much more stronger, we do hope that in 2015, Enugu will come out good especially in terms of consumer affairs.”

Speaking on the expected direction of the market in 2015, Amadi noted that the possibility of having the Transitional Electricity Market (TEM) come into force in January 2015, means that the distribution companies will have no option but to trade fairly.

He explained that as a game changer in the market, operators will either submit to competitive trading or lose market credibility and revenue, considering that the bulk trader is expected to only deal with operators without unwholesome sentiments.


– This Day

In this article

Join the Conversation