The Federal Government on Monday stated that the Nigerian Electricity Regulatory Commission had several options at its disposal that it could use to enforce the contract mandating power distribution companies to provide meters for their customers and eliminate estimated billing in the sector.
According to the Minister of Power, Works and Housing, Babatunde Fashola, one of the options is for NERC to insist that the Discos must recapitalise in order to adequately fund the supply of meters and distribution equipment in their respective franchise areas.
Speaking during a live television programme monitored by our correspondent in Abuja on Monday, the minister stated that he had no issue with the power distributors, but stressed, “I want them to take responsibility of their customers who call me.”
Last week Monday, the Federal Government ordered NERC to enforce the contract for the Discos to provide meters and end estimated billing.
It said the directive to NERC became inevitable following the number of complaints coming to it for meters, which the Discos should supply, as well as concerns about estimated billing and mass disconnection, adding that the situation would not be allowed to continue.
Providing details as to why the government gave the order, Fashola said, “There are many things that NERC can do and one of the obligations and contracts between the BPE (Bureau of Public Enterprises) and the Discos is that certain number of meters will be supplied under the contract; that’s a contractual obligation. And if the contractual obligation inures to my favour, I should be able to go and enforce it.
“There are also statutory and regulatory obligations, which are conditions for the grant of the licences by NERC to the Discos. Under the terms of their licences, there are things they are supposed to do, and within the law, there are things that NERC as a regulator can and should do if a licensee is not fulfilling the terms of that licence.”
The minister added, “So, nobody in this system is helpless, whether the BPE or NERC. The BPE is a contracting party, not the Ministry of Power, NERC is a regulatory authority, not the Minister of Power. For example, Sections 73 and 74 (of the Electric Power Sector Reform Act, 2005) provide NERC with very clear power to amend the licence and withdraw or revoke the licence for non-compliance. That is NERC’s job to exercise its powers when it feels that certain things are not done.
“But the exercise to withdraw a licence is something that must be done very reluctantly and only as a last resort in the ultimate public interest. There are other things that they (NERC) can do; for example, insist that they (Discos) must recapitalise and fund the supply of meters and distribution equipment to take power to the people. The purpose of the briefing (last Monday) was to tell everybody to go and do their job.”
At the briefing last week, Fashola, after reading several sections of the EPSR Act 2005, stated that it was necessary to direct NERC to step in to “enforce the contract of Discos to supply meters and act to ensure the urgent and speedy supply and installation of meters with a view to eliminating estimated billing and promote efficient industry and market structures.”
“NERC should stop the Discos from threatening private entrepreneurs from entering the market to supply consumers, whom the Discos cannot supply, and to license such persons subject to terms and conditions in order to promote competition and private sector participation and avoid a private monopoly of power,” he added.