Government Orders NERC to Revoke Licenses of Underperforming DISCOs

The Federal Government has issued a stern directive to the Nigerian Electricity Regulatory Commission (NERC), urging the withdrawal of licenses from electricity distribution companies (DISCOs) failing to meet performance benchmarks.

According to recent data, power generation in March 2024 witnessed a significant year-on-year decline of 21%, plummeting to 3,475MW from 4,404MW in the same period of 2023. This decrease is attributed to various challenges, including inadequate investment and gas supply.

Despite a slight month-on-month increase, with power generation rising to 3,475MW in March 2024 from 4,043MW in February 2024, numerous DISCOs have resorted to load shedding due to supply constraints. The National System Operator, a unit within the Transmission Company of Nigeria (TCN), reported persistent low supply, adversely affecting households and businesses nationwide.

Minister of Power, Adebayo Adelabu, underscored the pivotal role of the distribution segment in the electricity supply chain, labeling it as the weakest link. He emphasized the need for NERC to compel DISCOs to enhance supply, proposing stringent sanctions for utilities failing to meet obligations, including license revocation.

Adelabu highlighted the government’s intention to restructure DISCOs, advocating for smaller entities with more manageable franchise areas, potentially restricted to individual states. He stressed that performance lapses, such as erratic power supply, could warrant license revocation.

Addressing journalists, Adelabu outlined plans to boost power generation to 6,000MW within the next six months by settling outstanding debts owed to generation companies and gas suppliers. He acknowledged the need to gradually phase out electricity subsidies over the next three years, transitioning the sector towards commercial viability.

In a related development, the Managing Director of the Transmission Company of Nigeria, Engr. Sule Abdulaziz, disclosed that a recent fire incident at its Kano substation occurred during maintenance work to rectify a transformer leak.


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