The Nigerian Electricity Regulatory Commission (NERC) has announced a new set of directives for the country’s electricity distribution companies (DisCos) for 2025, following criticism from an energy expert regarding the DisCos’ poor performance in 2024.
This announcement comes as a continuation of the Order on Performance Monitoring Framework for DisCos issued on July 5, 2024, with the new Addendum-1 taking effect on December 23, 2024.
NERC confirmed the issuance of this order in a statement released on December 31.
The Order aims to enforce compliance with Key Performance Indicators (KPIs) to enhance the operational efficiency of the DisCos.
NERC is determined to compel DisCos to boost their operational performance, which includes holding management accountable, improving energy delivery to customers, and enhancing customer satisfaction.
In addition to the performance obligations and customer service guidelines outlined in the previous Order to the DisCos, Addendum-1 has assessed three of the Key Performance Indicators (KPIs) as follows:
1. The penalty for defaulting on energy offtake has been extended from one month to two months per quarter. If a DisCo fails to offtake up to 95% of the available nominated energy in two out of the three months within a quarter, it will incur a 5% reduction in its administrative operational expenditure for the following quarter.
2. The requirement for reporting using the Uniform System of Accounts has been adjusted from a monthly to a bi-monthly compliance target. If a DisCo fails to meet the compliance targets for two months, it may face enforcement actions, including the potential withdrawal of the “Fit and Proper” approval for the DisCo’s Chief Finance Officer or equivalent position.
3. The timeline for resolving complaints through the NERC Contact Centre and NERC HQ has been revised from a two-month compliance target for DisCos.
In addition to the performance obligations and customer service standards outlined in the previous Order, Addendum-1 has revised three of the KPIs, including extending the penalty for default in energy offtake from one month to two months per quarter.
