…Plans regulations to incentivise metering, discourage estimated billing
Lagos — Power sector regulator, the Nigerian Electricity Regulatory Commission, NERC, has said it is implementing “a more robust tariff review process” aimed at improving the performance of the Nigerian Electricity Supply Industry, NESI.
In a newly-released Performance Improvement Plan, PIP, for electricity distribution companies or Discos, the commission said the move was in pursuit of the Power Sector Recovery Programme, PSRP.
It said the process will involve a review of the application of the capital expenditure allowances in the Multi-Year Tariff Order, MYTO, model for compliance with the PIPs to be prepared by the Discos and approved by the commission.
This came as the commission commenced public consultations on two regulations aimed at incentivising metering of electricity customers while discouraging estimated billing.
According to a tweet by its official Twitter handle, @NERCNG, the public hearing is part of its mandate to ensure quality of service delivery and increase access to electricity supply.
The proposed regulations are: Capping of Estimated Billing and Distribution Franchising.
NERC said the implementation of the PIP regarding the Multi Year Tariff Oder would be strictly monitored by it, adding that the planed tariff review will prioritise expenditure by electricity distribution companies and reflect changes in the operational environment that have occurred since the last tariff review.
It is noteworthy that one of the overarching objectives of the PSRP is the elimination of tariff shortfalls and the enforcement of market obligations, NERC said.
The PIP is developed by the Discos and will cover the period 2020-2024 tariff period but will be subject to the contractual provisions of the performance agreements executed between the core investors and the Bureau of Public Enterprises, BPE, in respect of the allowances for capital and operating expenditure in the remaining term of the agreement.
Upon approval by the Commission, the PIP will form the basis of prioritising and monitoring the capital investment initiatives of the Discos with revenue adjustment for non-implemented projects.
According to NERC, the approved PIPs will also be the basis for the defining Performance Standards/Key Performance Indicators for the next five-year tariff period by the commission.
Emphasis will be on improvement in energy throughput and delivery by Discos, reduction in aggregate technical/commercial losses and overall improvement in service delivery to customers.
Discos are also expected to set fresh five-year plans for their respective companies and electricity consumers.
“The preparation of the PIP is an opportunity for Discos to set out what they intend to deliver to consumers over the five-year tariff period as well as the associated costs, in line with the MYTO methodology. The Disco’s PIP is expected to draw from the vision of the Electric Power Sector Reform Act, existing NERC rules and regulations, and the Power Sector Recovery Programme,” the document said.