NERC, Discos clash in Port Harcourt over imposition of fines, low tariff

… Discos want free market system, cost-reflective tariff

Anger may be building up between the nation’s power regulatory agency and the private sector players in the industry, especially the distribution companies.

Signs of this emerged in Port Harcourt recently when the National Electricity Regulatory Commission (NERC) clashed with the representative of the Association of the Nigerian Electricity Distributors (ANED) at a power safety seminar.

The clash, which almost led to a shouting match, revealed the anger and probable frustrations building up in the hearts of the equity owners in the 11 distribution companies that make the power distribution companies (Discos).

NERC had accused the Discos of inefficiency including absence of pre-paid meters, saying the Discos were hiding under non-payment by consumers to owe the transmission companies and the government.

Abdulrasheed Busari, senior manager of NERC, East and South South, said by now, all consumers should be in pre-paid metering system such that they would not only pay what they consumed but they would also pay before service, thereby eliminating debt overhang in the retail sector of the power chain.

He accused the Discos of failing to flood Nigeria with metres, especially pre-paid ones and said NERC was no longer prepared to hear that consumers did not pay.

He said the Commission was interested in the benefits of privatisation in the form of adequate power supply in homes, and assured of more fines coming on erring Discos.

This seemed to spark anger as the representative of the ANED, Azu Obiaya, exploded, accusing NERC of being out to snuff out the Discos. He pointed to the ceiling on tariff imposed by NERC in the face of what he called excessive expenses to retail power, yet, NERC expected the Discos to perform magic.

As tempers flew, Obiaya said it was wrong to expect a Disco to spend on procurement of equipment, repairs, etc, and incur costs and losses that claim almost the money they collected with little or no profit.

The Discos demanded for what the ANED representative called cost-reflective tariff to save the distressed distributors, wondering how the Discos struggling to make ends meet would continue to pay such huge fines imposed by NERC.

As calm returned, the NERC official promised to look into the fines already imposed but insisted that the fining system would not be removed because it was meant to make the Discos sit up.

It all began when a consulting firm, Spark Media, brought stakeholders in the power sector to look into safety in the power sector.

Chinedu Amah, managing director of Spark Media, said the seminar system was an initiative of the company to create a platform for review of issues affecting the industry on a regular basis and to present a common position on how to move the power sector forward.