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NERC Threatens To Revoke DISCOs’ Licences Over Regulatory Infractions

The Nigerian Electricity Regulatory Commission (NERC) has served notices to eight electricity distribution companies (DISCOs) on its intention to revoke their  licences if they failed within 60 days to correct ‘breaches of the terms and conditions of their power purchase agreements’.

Specifically, the industry regulator accused the DISCOs of breaching the terms and conditions of their electricity distribution licences stipulated in the Electric Power Sector Reform Act (EPSRA).

A news report sourced from Premium Times listed the affected power entities as the Abuja Electricity Distribution Company Plc (AEDC), Benin Electricity Distribution Company Plc (BEDC), Enugu Electricity Distribution Company Plc (EEDC), Ikeja Electric Plc (IE) and Kaduna Electricity Distribution Company Plc (KAEDCO),

Others alleged to have committed regulatory infractions are, Kano Electricity Distribution Company Plc (KEDCO), Port Harcourt Electricity Distribution Company Plc (PHEDC) and Yola Electricity Distribution Company Plc (YEDC).

In a published advertorial signed by its Commissioner on Compliance, Dafe Akpeneye,  the NERC stated that the breaches had to do with their failure to comply with the directives on the 2016 – 2018 Minor Review of Multi Year Tariff Order (MYTO) and the Minimum Remittance Order for the Year 2019.

For instance, while the AEDC was accused of not remitting over N5 billion out of over N7 billion owed NBET for gas supplies, BEDC was alleged to be owing over N3.6 billion out of N4.39 billion while EEDC’s indebtedness to NBET was put at N112.6 million.

The Ikeja Electric Plc was accused of paying only N4.42 billion out of  its N7.37 billion obligatory liability just as its Kaduna counterpart, KAEDCO was reported to have paid N3.42 billion out of its N3.8billion debt. Also, KEDCO was accused of paying only N2.53 billion out of its N3.33 billion debt obligations,  PHEDC paying N3.32 billion out of N3.65 billion debt and YEDC also owing about N150 million, with the payment of N1.76 billion out of its N1.95 billion owed.

The NERC had in 2015, pursuant to its regulatory mandate as provided for in Sections 32 and 76 of EPSRA, issued the MYTO – 2015 Tariff Order aimed at entrenching cost-reflective tariffs in the power industry.

Specifically, the MYTO is a regulatory document that sets allowable tariffs as revenues for operators across the power sector value chain.

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