- NERC sanctions DisCos for failing to meet Key Performance Indicators (KPIs), including energy delivery and customer complaint resolution.
- DisCos face penalties such as a 5% reduction in operational expenditure for non-compliance with energy offtake and customer complaint resolution targets.
- NERC introduces daily penalties for service failures, including delays in billing, disconnections, and metering issues.
The Nigerian Electricity Regulatory Commission (NERC) has sanctioned electricity distribution companies (DisCos) for failing to meet required Key Performance Indicators (KPIs). NERC issued Addendum 1 on the Performance Monitoring Framework for Distribution Companies to enforce compliance and improve service delivery.
The new order, signed by NERC Chairman Sanusi Garba and Commissioner for Legal, Licensing, and Compliance Dafe Akpeneye, updates the previous framework issued on July 5, 2024. It took effect on December 30, 2024. The revised framework targets improved energy delivery, customer complaint resolution, and accountability among DisCos.
One of the significant changes penalises DisCos that fail to offtake at least 95% of the nominated energy for two or more months in a quarter. DisCos that miss this target will face a 5% reduction in their administrative operational expenditure in the following quarter.
Another key KPI requires DisCos to resolve 75% of customer complaints within each quarter. If a DisCo does not meet this target, NERC will withdraw the Key Responsibility Level (KYL) of the Head of Customer Service or the officer responsible for complaint resolution.
The order also addresses non-compliance with the Uniform System of Accounts (USoA) reporting. DisCos that fail to submit reports for up to two months will lose the “Fit and Proper” approval of their Chief Finance Officer or equivalent.
NERC has set penalties for service failures, including N10,000 per day for delayed billing, N2,000 per day for disconnections or interruptions, and N1,000 per day for issues related to metering, delayed connections, or voltage irregularities.
This latest move follows a 2024 penalty of N10.5 billion imposed on eleven DisCos for failing to cap estimated bills for customers without meters. NERC continues to hold DisCos accountable for their service delivery.
Consumers should report DisCos that fail to supply necessary equipment, such as cables and transformers. NERC aims to improve service and reduce complaints in the electricity sector.
With this order, NERC stresses the importance of holding DisCos accountable for delivering on their promises. The commission’s regulatory framework ensures that Nigerians receive better electricity services.
The new sanctions send a clear message to DisCos that non-compliance with KPIs will have tangible consequences. These include financial penalties and the withdrawal of key staff approvals, which could disrupt operations.
As the energy sector evolves, NERC takes a more aggressive approach to enforcement. The commission’s commitment to improving the country’s electricity distribution system shows its strict measures.
With these changes, NERC aims to address long-standing issues in Nigeria’s electricity distribution sector. The goal is to motivate DisCos to improve their services and meet Nigerian consumers’ expectations.
The update to the performance monitoring framework forms part of NERC’s broader effort to enhance electricity service delivery. The commission will enforce stricter compliance with penalties in place and bring about positive change in the sector.