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Power: Fashola issues quit notice to DisCos

Power: Fashola issues quit notice to DisCos

..Rules out increase in tariff

Against the backdrop of incessant complaints of poor performance against electricity distribution companies in the country, the minister of Power, Works and Housing Mr. Babatunde Raji Fashola, has threatened to withdraw the operating licence of any ailing Disco.

The Minister said that he could no longer contain with the complaints coming to the government about meters, estimated billings. This is even as the minister ruled out the possibility of increasing tariff without adequate provision of meters, noting that metering is a condition precedent to tariff review.

The Minister, who made this disclosure in a press briefing at Abuja, said complaints of poor service delivery and mass disconnections, where not everybody is owing cannot continue.The Minister had subsequently advised the electricity distribution companies otherwise known as DisCos to compete to deliver power to customers or exit the electricity market for investors that are ready to satisfy consumers. He directed the Nigeria Electricity Regulatory Commission (NERC) to work toward eliminating estimated billings.

Fashola said supposing he had his way, he would have directed that estimated billing regime terminates immediately, but the local capacity is not enough to bridge the metering gap in the market.He said that “government must act. DisCos bought these assets with their eyes wide open and they must compete to deliver or exit.”

Fashola directed Nigerian Electricity Regulatory Commission (NERC ) to ensure that the DisCos improve on their distribution of equipment and capacity to take up the available 2,000mw in order to optimise the use of electrical resources produced by the GenCos.He mandated NERC to “enforce the contracts of the Discos to supply meters, and act to ensure the speedy installation of meters with a view to eliminate estimated billings and promote efficient industry and market structure.

“To stop the DisCos from preventing entrepreneurs from entering the market to supply the consumers whom the DisCos cannot yet 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 in the market.” He said that it is neither his intention nor that of government to take over the investors’ business, but the government desires to see the firms flourish in a competitive environment. The government will, however, find a solution whenever the DisCos are inefficient and not ready to improve, he said.

He lamented that even where DisCos installed 10,000, about 8,000 were bypassed within weeks after installation.

Fashola ruled out the possibility of increasing tariff without adequate provision of meters, noting that metering is a condition precedent to tariff review. Expressing his opinion in favour of tariff increase, the minister countered himself on the issue, stressing that “after that tariff increase why should we increase tariff without meters.” He said for the customers to pay the correct tariff for the power they consume, the suppliers have to defray the distrust by first providing meters for consumers to know what they are paying for. Asked by the directive if his statement that the DisCos should compete or quit is a direct invocation of revocation the privatisation to the inefficient private investor, the Permanent Secretary, Dr. Louis Edozien explained that the eligible customers regulation is a means of getting the customers who are not satisfied with the service they are getting from the DisCos to buy their power directly from the GenCos. Secondly, that the DisCos should not refuse unsatisfied customers from going to get power.”

He, however, noted that upon the realisation that they have nothing to lose from the eligible customers’ policy, the distribution firms have started complying with the pitch reluctantly.The NERC chairman, Prof. James Momoh, whom the minister asked to inform the public when the Metering Asset Providers licensees would start providing the meters, said that the meter manufacturing companies in Lagos are ready to roll them out.

As Fashola insisted that the chairman informed Nigerians on when the installation would begin, he mandated Momoh to after the briefing present to him, a report on the number of licensed companies for meter provision, the DisCos they are working with and the areas they are supplying meters to. Momoh said that over 50 firms have been licensed to supply meters.

The minister, who asked the Permanent Secretary to take note of the directive, said that the customers should know when meters are delivered to their areas for them to make relevant arrangements.On billing, Momoh said, NERC has put together a prepaid market for which customers can decide which power they want to use and for the appropriate rate to be paid for.”

He added that with the investment in metering NERC will be able to eliminate estimated billings for people to pay their appropriate cost. The commission, he said, is working hard in the area of customer enumeration in order to avoid a foul play on the customers by the DisCos. He said that NERC is putting in place penalties to ensure that the DisCos abide by the rules and regulations.

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