From Isaac Anumihe, Abuja
Nigerian Electricity Regulatory Commission (NERC) has warned the electricity distribution companies (DisCos) against instructing customers to pay for the replacement of faulty and obsolete meters within their franchise areas.
This instruction, NERC said, contravenes the commission’s Order No. NERC/246/2021 on the Structured Replacement of Faulty and Obsolete end-use Customer Meters in the Nigerian Electricity Supply Industry.
The order, according to NERC, clearly states that no customer with a meter should be forcefully migrated to estimated billing.
“If any customer’s meter is adjudged by any DisCo to be obsolete or faulty, it is the responsibility of the DisCo to replace the meter free of charge, provided that the fault was not caused by the customer.
The commission restates its commitment to protect customers’ interests and rights by ensuring compliance with established regulatory standards and enforcing regulatory penalties for non-compliance by its licensees.
We urge customers to report cases of non-compliance to the Order by any DisCo” the commission, said.
The inability of the DisCos to replace faulty equipment has, therefore, lent credence to the suggestion that the DisCos should recapitalise to the tune of $500 billion.
Managing Director of Azura Power West Africa, Mr Edu Okeke, made the moved for the recapitalisation of the distribution companies (DisCos) because they appear to be insolvent.
Speaking at the 4th Annual Workshop of Power Correspondents Association of Nigeria (PICAN) in Abuja, Okeke said that most DisCos have negative equity, leaving them with little or no financial stake.
According to him, many DisCos struggle to pay their total bills to the entire value chain. This, he said, is largely due to lack of capacity to make the necessary investments to recover costs effectively.
So, to ensure that there’s stability in the power supply value chain, the over $250 million debt burden of DisCos should be written off.
“Governments should consider removing these debts from the DisCos’ books and mandating them to increase their capital by at least $500 million each. This will require existing shareholders to dilute their holdings to attract new investors with real capital to invest in infrastructure — not just on paper, but in transformers, cables, and equipment to serve customers reliably.
“To enable meaningful progress, DisCos must be adequately capitalised. Unfortunately, most DisCos have negative equity, leaving them with little or no financial stake. This situation must change. Ideally, no DisCo should operate without at least $250million in shareholder funds. Just as the Central Bank of Nigeria has raised capital requirements for banks to ensure their stability and capacity to serve, the Nigerian Electricity Regulatory Commission (NERC) should mandate similar capitalisation standards for DisCos” the MD said