FG May Close 8 Discos Over Breach of Reform Act

The Federal Government may cancel the licences of eight power distribution companies as the Discos breached some provisions of the Electric Power Sector Reform Act in July 2019.

According to the Nigerian Electricity Regulatory Commission, the eight power firms include Abuja, Benin, Enugu and Ikeja Discos.

Others are  Kaduna, Kano, Port Harcourt and Yola Discos.

In a notice posted on its website on Tuesday evening, the power sector regulator said it intended to cancel licences issued to the eight Discos pursuant to Section 74 of the EPSR Act.

In the eight-page notice to the Discos, which was signed by one of the NERC’s commissioner, Dafe Akpeneye, the commission stated that the power firms had 60 days to explain why their licences should not be cancelled.

It said, “Take notice that pursuant to section 74 of the EPSR Act and the terms and conditions of electricity distribution licences issued to the distribution licensees by Nigerian Electricity Regulatory Commission has reasonable cause to believe that the Discos listed below have breached the provisions of EPSRA, terms and conditions of their respective distribution licences and the 2016 – 2018 Minor Review of Multi Year Tariff Order and Minimum Remittance Order for the Year 2019.”

Outlining the Discos, it said, “Abuja Electricity Distribution Company Plc; Benin Electricity Distribution Company Plc; Enugu Electricity Distribution Company Plc; Ikeja Electric Plc; Kaduna Electricity Distribution Company Plc; Kano Electricity Distribution Company Plc; Port Harcourt Electricity Distribution Company Plc; and Yola Electricity Distribution Company Plc.”

The commission said it considered the actions of the aforementioned Discos as “manifest and flagrant breaches” of EPSRA, terms and conditions of their respective distribution licences and the order.

It stated that the commission “therefore requires each of them (Discos) to show cause in writing within 60 days from the date of receipt of this notice as to why their licences should not be cancelled in accordance with section 74 of EPSRA.”

Further analysis of the notice showed that the eight Discos failed to meet the expected remittance threshold for the month of July 2019 billing cycle to the Nigerian Bulk Electricity Trading company.

Three other the Discos remitted 10 per cent during the period, while the highest remittance was 40 per cent, as they all fell short of the expected minimum remittance stipulated by NERC