…regulation will force tariff hike for residential customers
By Chris Ochayi
THE Electricity Distribution Companies, DISCOs, have raised an alarm that the eligible customer regulation would affect their ability to recover revenues from power customers.
They also warned that with the removal of eligible customers from the DISCOs’ network, the huge revenue gap left would be borne by residential class of customers.
Executive Director Research and Advocacy of Association of Nigerian Electricity Distributors, ANED Mr. Sunday Oduntan, who stated this while explaining the recent notice of force majeure submitted by the DISCOs warned that the current market shortfall of N892 billion would be worsened by the new regulation.
“Indeed, the notice of force majeure submitted by the DISCOs, in itself, is not a declaration of force majeure. It is standard in any commercial agreement, and is predicated on the concern that the DISCOs, already on the verge of bankruptcy, will be further constrained in meeting the obligations of their Performance Agreements with BPE.
“No difference from a previous situation in which the regulator, arbitrarily, removed Collection Losses from the DISCOs’ tariff in April 2015, a contributor to the current market shortfall.
“Unless we begin to see a consistency of sector governance, a critical requirement for the viability and sustainability of the Nigerian Electricity Supply Industry, NESI, it is unlikely that we will achieve the objective of 24/7 power supply, an outcome that all Nigerians deserve.
“There is a need for clarification on the recent Notices of force majeure that were submitted to the Bureau of Public Enterprises, BPE, by the electricity distribution companies, DISCOs, based on the recent issuance of the Eligible Customer regulation by the Nigerian Electricity Regulatory Commission, NERC,
Eligible Customer regulation allows for certain customers who consume more than 2 MW of electricity per month to leave the DISCOs network and contract directly with power generators for the supply of power.
“The primary objectives of this arrangement are to promote competition and increase the supply of power. As DISCOs, we believe that these are laudable objectives and are nothing less than that which we seek, as we strive to inject the efficiency into our operations that will improve the power supply experience for our customers.
“While we do not question the legitimacy of the Honourable Minister of Power, Works and Housing’s right to declare Eligible Customers, we believe that the declaration is premature and is inconsistent with the pre-conditions established under the Electric Power Sector Reform Act (EPSRA), 2005.’’