NERC Reels Out New Sanctions For DisCos

• NERC outlined seven key performance indicators to assess DisCos’ performance, including energy off-take, revenue recovery, and compliance with reporting and implementation of directives
• NERC announced specific sanctions for DisCos, including reductions in guaranteed Admin OpEx and fines for non-compliance in resolving customer complaints, to drive increased operational performance and better service delivery

The Nigerian Electricity Regulatory Commission (NERC) has announced new sanctions for Distribution Companies (DisCos) that fail to meet certain contractual agreements with customers and regulators.

In an Order on Performance Monitoring Framework for all DisCos, NERC outlined seven key performance indicators that will be used to assess their performance. These include:

1. Energy off-take relative to partial contracted capacity
2. Revenue recovery rate
3. Compliance with reporting of a uniform system of accounts
4. Compliance with API feeder streaming
5. Compliance with the order on capping of estimated bills
6. Compliance with the implementation of forum decisions
7. Compliance with service standards for the resolution of complaints received through the NERC contact centre and NERC headquarters

The order, signed by NERC’s Chairman, Sanusi Garbo, and Commissioner for Legal, Licensing & Compliance, Dafe C. Akpeneye, aims to hold the top management of each DisCo accountable for their compliance with reporting requirements and implementation of the commission’s directives.

“This will drive increased operational performance from DisCos, thereby improving energy delivery to customers within their franchise areas,” the order stated.

Specific sanctions include:

• Failure to off-take up to 95 per cent of available nominations in any month will result in a rectification directive.
• Failure to off-take up to 95 percent of available nominations in two of the three months in any quarter will result in a 5 percent reduction in the DisCo’s guaranteed Admin OpEx for the next quarter.
• Overbilling customers will result in a 10 percent deduction of the total overbilling amount from DisCo’s annual Admin OpEx allowance during the next tariff review and a credit adjustment for overbilling customers.
• If overbilling exceeds 20 percent of the allowed cap or involves more than 20 percent of the unmetered customer base, NERC may take further enforcement actions, including withdrawing the Key Performance Indicator (KPI) of the Head of Billing or the utility officer responsible for billing.

For non-compliance in resolving complaints through the NERC contact centre or headquarters after the expiration of timelines in the Customer Complaints Resolution (CPR), the following fines will apply:

• Billing: N10,000 per day
• Disconnection: N2,000 per day
• Interruption: N2,000 per day
• Metering: N1,000 per day
• Delay in connection: N1,000 per day
• Voltage issues: N1,000 per day

These measures ensure better service delivery and accountability from the DisCos to their customers.