N2m transformer scandal: Disco to forfeit assets on tariff – NERC

*Electricity distribution transformer.

*Electricity distribution transformer.

Oscarline Onwuemenyi

29 June 2016, Sweetcrude, Abuja – The Nigerian Electricity Regulatory Commission, NERC, has said the Kaduna Electricity Distribution Company (KEDC) would not get a return on the asset in its tariff for failing to produce a 500kva electricity transformer to the Southern Kaduna community which contributed N2 million to the company six months ago.

NERC’s verdict came on Tuesday it intervened to resolve the brewing crisis in the KEDC coverage area following protests by youths of two communities in the North and South of Kaduna.

One of the communities, Badarawa Community said it had contributed N2 million to purchase a transformer and was awaiting connection to the KEDC network.

Also, the Minister of Works, Power and Housing, Mr. Babatunde Fashola had ordered an investigation by the regulatory agency into the alleged exchange of money following a protest letter by the youth of the community to his office.

Subsequently, the Acting Chairman of the Commission Dr. Anthony Akah, dispatched an investigation team to Kaduna for on the spot assessment and resolution of the complaint. The team discovered that the community actually donated the Transformer to KAEDCO to facilitate the restoration of power to their area which had been in darkness for the past six months.

The agreement is however, in clear violation of the Commission’s regulation which makes installation of facilities the Disco’s responsibility. The community representatives were informed that all forms of donations to the distribution network should be governed by the Commission’s Investment In Network Regulation.

Meanwhile, the purchased transformer would be connected to provide electricity to the community and reflected in KEDC’s Regulated Asset Base. This implies that KEDC would not get a return on the asset in their tariff.

Similarly, Janruwa Community, at a meeting organised by the Commission in Kaduna, revealed that the youths of the locality protested what they regarded as an extensive darkness as they have been out of supply for over a year.

In their defence KEDC informed the NERC investigators that the Janruwa community was very large, requiring about 500 KVA transformers for a start, which was not available. The company said it had taken a 300 KVA transformer to the community but had to take it away when it realised the density of the community, with the intention of replacing it with a 500KVA transformer.

The removal of the 300KVA transformer had precipitated the protests by the youths.
However, the Commission at the meeting had extracted the commitment from KEDC to provide Janruwa with a 500 KVA transformer before the end of June 2016. This is in addition to returning of, and installation of a 300KVA transformer earlier removed which will give the Community a total of 800KVA capacity.

However, the parties to the dispute were requested to avail themselves of the Commission’s redress mechanism as contained in the Customer Complaints Handling; Standards and Procedures Regulation and direct disputes to Forum Offices established in State Capitals.

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