The Nation Newspaper

Tag: DISCOS

  • Agency directs Discos to comply with standards

    The Managing Director, Nigerian Electricity Management Services Agency (NEMSA), Peter Ewezor, has directed Electricity Distribution Companies (DISCOS) and Construction Companies to comply with Sector Specific Minimum Standards and Global Best Practices on Safety to avoid being sanctioned  by the body.

    Speaking while on an inspection of project sites of  the Abuja Electricity Distribution Company(ABUJA DISCO) and China Civil Engineering Construction Corporation (CCECC), Ewezor said there are pronounced cases of impunity and technical gaps in the power and construction projects in Abuja and other parts of Nigeria .

    He said NEMSA is carrying out nationwide enforcement /advocacy visitations to sites where there are faults in power lines, railway/ roads and building constructions.

    Ewezor, who identified some areas in the FCT with some constructions defects, said the companies would be sanctioned, unless they rectify the defects.

    He said with the coming into effect of the NEMSA ACT, 2015,  the era of impunity is over, and that it would no longer be business as usual.

    The honey moon is over, Nigerians and Stakeholders in Construction & Electricity sector must imbibe the culture of change in all facets of life and do the needful to avoid sanctions, he said.

    He listed the defaulting companies in the FCT to include Abuja Electricity Distribution Company, which has many of its feeder pillars dangerously exposed, as well as  its high tension cables too low that it could be touched.

    He also listed the CCECC which built its railway line in Kubwa, near the 33KV power tension.

    The NEMSA chief said letters had been written to these companies about the dangers these projects posed to human lives, adding that they would still be reminded to rectify these projects.

    He streesed the need for  the affected companies to comply and rectify the defects projects, failure NEMSA would visit them with the full weight of the law.

    Ewezor called on the companies concerned to provide what he called, cradle guards, or armod cables to protect the exposed high tension cables .

    He enjoined the Electricity Distribution Companies and Construction Companies operating in Nigeria to institutionalise the ideals of Projects Monitoring & Evaluation its Governance structure in order to ensure effective monitoring of Projects.

    The unscheduled NEMSA site visitation had in attendance, the full compliments of the Media (Electronics & Prints), senior officials/Management Team of NEMSA and Consumer Rights Advocate, Kunle Kola Olubiyo (President, Nigeria Consumer Protection Network), among others.

  • Agency directs Discos to comply with standards

    Nigerian Electricity Management Services Agency (NEMSA) has directed Electricity Distribution Companies (DISCOS) and Construction Companies operating in Nigeria to comply with sector specifics minimum standards and global best practices on safety to avoid sanctions by NEMSA.

    Speaking in Abuja, when he inspected project sites of Abuja Electricity Distribution Company (ABUJA DISCO) and China Civil Engineering Construction Corporation (CCECC), the company handling Abuja rail project.

    The Managing Director (NEMSA) and Chief Electrical Inspector of the Federation, Peter Ewezor said that there were pronounced cases of impunity and technical gaps in the power and construction projects in Abuja and other parts of Nigeria.

    According to him, NEMSA is carrying out nationwide enforcement /advocacy visitations to sites where there are faults in power lines, railway/ roads or building constructions.

    Ewezor who identified some areas in the FCT, where there were some constructions defects, said the companies would be sanctioned, unless they rectify these defects.

    He said with the coming into being of the NEMSA ACT, 2015, the era of impunity (anything goes is over) it would no longer be business as usual.

    The honey moon is over, Nigerians and stakeholders in construction and Electricity sector must imbibe the culture of change in all facets of life and do the needful to avoid sanctions.

    He listed the defaulting companies in the FCT to include Abuja Electricity Distribution Company, which had many of its feeder pillars dangerously exposed, or its high tension cables too low that it could be touched.

    He also listed the CCECC which built its railway line in Kubwa, near 33KV power tension.

    Ewezor explained that NEMSA had written to these companies about the dangers these projects posed to human lives, adding that they would still be reminded to rectify these projects.

    He reiterated that if the companies fail to amend these defective projects, then NEMSA would visit them with the full weight of the law.

    Ewezor called on the companies concerned to provide what he called cradle guards or armod cables to protect the exposed high tension cables.

    Ewezor enjoined the Electricity Distribution Companies and Construction Companies operating in Nigeria to institutionalised the ideals of Projects Monitoring and Evaluation its governance structure in order to ensure effective monitoring of projects.

    The unscheduled NEMSA site visitation had in attendance, the full compliments of the Media (Electronics and Prints), senior officials/Management Team of NEMSA and Consumer Rights Advocate,  Kunle Kola Olubiyo (President, Nigeria Consumer Protection Network) amongst others.

  • NERC mulls ultimatum for Discos on meters

    NERC mulls ultimatum for Discos on meters

    •Commission urges patronage of locally made meters

    The Nigerian Electricity Regulatory Commission ( NERC) yesterday said it intends to give the Electricity Distribution Companies (Discos) a 16-month ultimatum to meter all customers.

    Its Chairman, Dr. Sam Amadi, who spoke to reporters in Abuja, said at the expiration of the period, the unmetered customers would not be charged any bills.

    He also insisted that Discos must install meters for customers that have paid their money in the Credit Advance Programme for Metering Implementation (CAPMI) within four months.

    Should they fail to install the meters within four months, the affected customers will be exempted from paying bills until the Discos install their meters.

    The proposal, said Amadi, is to aggressively drive the Discos to address the metering gap in the electricity market.

    He said the commission has chosen to issue an order setting up the cap with an effective implementation date after a moratorium of four months to allow the Discos to appropriately adjust their metering program.

    The chairman added that all estimates being imposed by Discos within the moratorium period shall be strictly based on the Commission Billing Estimation Methodology.

    As soon as the capping regulation commences, he said the extant regulation on estimation methodology will be vacated.

    He said: “The Discos have, we are proposing, up till the next four months before this cap starts. And when the cap starts, the Discos have additional 12 months, making it a total of 16months  within which to meter every customer.

    “If after that 12 months, the customer is not metered, that customers will be excluded from paying bills at all.

    “And customers who have paid their money on CAPMI 45 days delivery of meters that have not delivered, within these four months, the Discos should make sure they completely install meters to all those customers that have paid money for meters.

    “Within that four months, if any CAPMI customer has not been metered, such CAPMI customer after the four months will not be charged any bill until they are metered. “

    He said the commission received petition from some local meter manufacturers alleging that some Discos have violated local content obligation by installing imported meters when there are locally manufactured meters.

    NERC, according to him, has started investigation of the allegation. He urged the Discos to note that the commission will mete out severe sanctions to any operator who violates the regulations on metering and local content.

    Amadi said in the last two weeks, there has been agitation by local manufacturers of meter on low patronage by the Discos.

    The manufacturers, said Amadi, have claimed that foreign meter manufacturers are being patronised at their detriment. He however called on NERC to protect local industry.

    Amadi said: “ It is important to make it clear that the Nigerian electricity industry is designed to be efficient and competitive so that customers have access to adequate and reliable electricity at affordable prices. It is not designed to restrain free trade. Rather, it is designed to contribute maximally to the growth of the Nigerian economy.”

    He said the leadership of the commission is strongly committed to promoting local content because it wants the growth in the electricity sector to contribute to improvement in job creation and household income.

    The chairman explained that it was for this reason that the NERC in 2012 made the regulation on local content obligating every operator in the electricity market to continuously localise employment, services and technology.

    Amadi said in order to overcome meter cloning and other forms of frauds against electricity market, many Discos are resorting to smart meters.

    He promised that NERC’s regulation will provide a supporting framework for smart metering in the Nigerian electricity market.

    The chairman however warned “customers to stop engaging in criminal acts of stealing power. It is this sort of sabotage at the retail level that increases the commercial losses that increase the tariff that consumers pay.

    “So, it is in the interest of consumers to report their neighbours who engage in such criminal activities to the Discos and the security forces. By protecting electrical installations, we reduce the cost of electricity generation, transmission and distribution. We benefit in terms of improved power supply and low tariff.”

    The chairman NERC has authorised the Discos to take severest actions possible to prevent, detect and prosecute customers who by-pass or clone meters, tamper with electrical installation, or in any way defraud them of approved revenue.

    “We call on the police authorities to step up prevention and prosecution of criminal activities in the electricity market,”he said.

  • Details of 50% tariff reduction unclear to DISCOs

    Seven days after the Nigerian Electricity Regulatory Commission (NERC) issued an order that collection losses should not to be passed on to electricity consumers, the distribution companies (DISCOs are yet to know the details of the new tariff, it was learnt yesterday.

    It was also gathered that the commission was yet to publish the new tariff structure, which varies from DISCO to DISCO as at press time yesterday.

    The Managing Director, Abuja Distribution Company (AEDC), Mr. Neil F. Croucher who spoke to reporters in Abuja yesterday lamented: “Well, we are yet to see the detail. It has not been published by NERC. But I understand that that 50 per cent was just an average and it varies from distribution company to distribution company.”

    NERC Chairman, Dr. Sam Amadi had last week announced that collection of losses for all DISCOs has been set at zero level.

    Amadi said: “Therefore, on March 9, 2015, NERC issued a new order to the effect that henceforth collection loss, which is defined as the ‘amount billed but not collected’, will not be automatically passed on to consumers of electricity. Consequently, the collection loss for all DISCOs is set at zero. It is now the responsibility of DISCOs to convince the regulator of any exceptional circumstances for such loss to be passed to the consumers.”

    According to Croucher, the AEDC is characterised by high commercial losses, which is as high as 50 percent and could mostly be remedied when every customer pays for electricity.

    He explained that for the company to bring down the tariff, customers have to pay for electricity because  non-payment of bills hold down the transformation process.

    Crourcer said energy theft and commercial losses are the basic setbacks in the electricity market since a study has revealed that the technical losses which the firm incurs is only about 14 per cent. He said due to the installation of new transformers, the AEDC has reduced the losses.

    Croucher said: “In our case just about  50 per cent losses, we still have low level of generation. So, the distribution companies have the challenges of high losses in our business . But what we do to bring losses down , is to help bring the price down everyone needs to pay for  electricity .

  • Electricity tariff slashed by 50%

    THE Nigerian Electricity Regulatory Commission (NERC) has reduced electricity tariff by as low as 50 per cent and as high as 103 per cent depending on the zone. This comes on the heels of complaints by electricity consumers over the estimated billings regime introduced by the electricity distribution companies (DISCOs)

    NERC in a statement on its website blamed the DISCOs for passing the bulk of lost energy on power consumers forcing them to pay for what they did not consume. The Commission determined as inappropriate to transfer to consumers, collection losses that are controllable by DISCOs. It stated that it is the responsibility of the DISCOs to collect their revenue from their customers.

    “Failure to do so should not be a penalty to customers who pay their bills. It is clear that removing the collection losses will lead to lower tariffs for consumers. The removal of collection losses from customer tariff has reduced tariff by more than 50 per cent in some places. Please note that the reduction does not affect the CBN facility and its repayment,” it stated.

    NERC Chairman Sam Amadi, said the Commission stated that on January 1, 2015 when it approved the take off of the Multi-Year Tariff Order (MYTO 2.1) that “we have received several complaints against the increase in tariff of different consumer classes. Industrial and commercial consumers under the auspices of the Manufacturers Association of Nigeria (MAN) petitioned the commission asking for a review of the MYTO 2.1 and requested drastic reduction of their tariff. They claimed that such astronomical increase in tariff would kill their business and lead to massive job losses.”

    Amadi argued that the Electric Power Sector Reform (EPSR) Act and the Business Rules of the Commission mandate the Commission to review its decision at the petition of an interested party who complains within 60 days of the decision.

    “Pursuant to these rules, we organised public hearing and received evidence from consumer classes on the affordability of the new tariff. The Commission also invited the Chief Executive Officers of the distribution companies to the hearing to respond to the case of the consumer groups.

     

  • NERC probes DISCOs’ load allocation rejection

    NERC probes DISCOs’ load allocation rejection

    • To deduct opening balance, VAT at source

    The Nigerian Electricity Regulatory Commission (NERC) has commenced investigation into why some Electricity Distribution Companies (DISCOs) are rejecting electricity load allocated to them.

    Its Chairman, Dr. Sam Amadi, who spoke with The Nation in Abuja, yesterday insisted that the DISCOs were not supposed to turn down the allocation offer.

    He however said some of the firms might have rejected their allocations due to network and capacity constraints.

    The chairman added that some of the firms might be afraid of paying the excess charge of accepting load allocation that is beyond their capacity.

    He said: “The companies might be rejecting load allocation because in some cases due to network constraint, some DISCOs may genuinely have distribution network and therefore they cannot take what is allocated to them.

    “Or in negative sense, when they are afraid of paying the excess charges when they have exceeded their capacity and they are given extra load they have to pay for.

    “So, we are investigating; we have asked our people to find out whether the DISCOs have genuine reasons. May be they are afraid of taking more than what they can sell.”

    Amadi also commented  on his  October 8 letter that mandated the the firms to pay their opening balance to the Nigeria Electricity Liability Management Company (NELMCO) and outstanding Value Added Tax (VAT) to Federal Inland Revenue Service (FIRS).

    In the letter, the commission requested the DISCOs the fund to NELCOM and FIRS or face the fine  of paying N10,000 per hour from October 17.

    The chairman recalled that the DISCOs appealed that they had paid but it was discovered that they were wrong.

  • Meters’ shortage hits distribution firms

    The distribution companies (DISCos) unbundled from the Power Holding Company of Nigeria (PHCN) have been hit by shortage of pre-paid meters.

    The privatisation of the successor companies, including the generation companies (GENCos), was done, among others, to improve electricity supply but sector analysts say since their coming into existence about a year ago,  this expectation has not been met.

    Officials of Ikeja and Eko Electricity Distribution Companies (IKEDC and EKEDC) told The Nation that  both firms do not have prepaid meters. Besides, there is a backlog of customers who have paid and have been awaiting collection for months.

    “I confirm to you  that we do not have pre-paid meters at the moment. But you cannot tell customers that we have exhausted our stock.

    “The Federal Government has stopped importation and sale of prepaid meters presently. Therefore, we only make efforts to see if we can deliver to customers that have already paid but for customers that are making fresh purchase, we cannot guarantee that now.

    “The fact is that the sale of pre-paid meters has been suspended until further notice,” the source said.

    With the scarcity of prepaid meters, the application of estimated billing for electricity consumers might likely increase. The prepaid metering system was introduced to reduce or eliminate estimated billing system because customers complained bitterly of being given outrageous bills. Prepaid metering enables a customer to plan his or her consumption according to his or her income.

    Customers, who spoke to The Nation at Somolu, Ikorodu, Island Business Units, among others, said they had been at the offices of the DISCos several times. They lamented that though they had paid for the meters, they were unable get them. Others said they had money on them but couldn’t pay as the power firms said there were no meters to sell to them.

    The new investors have been complaining about poor revenue collection from customers, which is below their projections on takeover of the assets in November last year.

    To improve revenue generation, the DISCos are exploring alternative sources of power supply, especially through embedded and captive power generation.

     

  • Shortage of pre-paid metres hits distribution firms

    The distribution companies (DISCos) unbundled from the Power Holding Company of Nigeria (PHCN) have been hit by shortage of prepaid meters.

    The privatisation of the successor companies, including the generation companies (GENCos), was done, among others, to improve electricity supply since their coming about a year ago,  this expectation has not been met.

    Officials of Ikeja and Eko Electricity Distribution Companies (IKEDC and EKEDC) told The Nation that  both firms do not have prepaid meters. Besides, there is a backlog of customers who have paid and have been awaiting collection months.

    “I will confirm to you as a friend that we do not have prepaid meters at the moment. But you cannot tell customers that we have exhausted our stock.The Federal Government has stopped importation and sale of prepaid meters presently. Therefore, we only make efforts to see if we can deliver to customers that have already paid but for customers that are making fresh purchase, we cannot guarantee that now. The fact is that sale of prepaid meters has been suspended until further notice,” the sources said.

    With the scarcity of prepaid meters, the application of estimated billing for electricity consumers, might likely increase. The prepaid metering system was introduced to reduce or eliminate estimated billing system because customers complain of being given outrageous bills. The prepaid metering enables a customer to plan his or her consumption according to affordability.

    Customers, who spoke to The Nation at Somolu, Ikorodu, Island Business Units, among others, said they had been at the offices for several times, though they had paid for the metres, they were unable get them. Others said they had money on them but couldn’t pay as the power firms said there were no meters.

    The new investors have been complaining about poor revenue collection from customers, which is below their projections on takeover of the assets in November, last year. To improve revenue generation, the DISCos are exploring alternative sources of power supply, especially through embedded and captive power generation.

  • CBN plans 10-year bailout for GENCOs, DISCOs

    CBN plans 10-year bailout for GENCOs, DISCOs

    The Central Bank of Nigeria is planning a 10-year bailout for the electricity distribution and generation companies otherwise known as GENCOs and DISCOs.

    The Chairman of the Nigeria Electricity Regulatory Commission (NERC), Dr. Sam Amadi, told Energy correspondents at a capacity building workshop in Abuja, Friday, that the commission will work out the amount of the facility later on Friday.

    He explained that the idea is to create a fund in place of the present revenue shortfall in the companies’ operations without inconveniencing the consumers.

    The NERC chairman said, “The CBN fund gives opportunity for DISCOs and GENCOs to have this money on time right now and then repay it over 10 years. They are giving us 10 years instead of five which reduces the amount that the consumers will pay. They have given us a 10 -year facility so to say.”

    His words: “But the key issue is the revenue shortfall in the market. We are arranging with the Central Bank of Nigeria to create a fund to cover the shortfalls without necessarily inconveniencing the consumers. It will be spread over 10 years. It gives the operators the opportunity to make quick investments and quick returns in terms of services.”

     

  • DISCOs’ growth tied to losses’ reduction, says BPE chief

    DISCOs’ growth tied to losses’ reduction, says BPE chief

    Reduction in the Aggregate, Technical, Commercial and Collection (ATC&C) losses is vital to the growth of the 11 power distribution companies (DISCOs), the Director-General, Bureau of Public Enterprise (BPE), Benjamin Dikki, has said.

    He said the failure of DISCOs to do that would affect their profitability and further impact negatively on the operations of the firms.

    The firms are Eko Electricity Distribution Company (EKEDC);  Ikeja Electricity Distribution Company (IKEDC);  Kano Electricity Distribution Company(KEDC); Kaduna Electricity Distribution Company; Jos Electricity Distribution Company; Abuja Electricity Distribution Company and others.

    Part of the conditions given investors of distribution firms during privatisation by the BPE, was that they should demonstrate the ability to reduce commercial and technical losses for growth.

    Dikki told The Nation that the companies’ ability to reduce losses would determine how well they can go in the industry. He said the losses arise when the firms were unable to fix their distribution problems, while commercial losses occur when the firms could not block loopholes in revenue generation and collection.

    He said: “The government is happy when the companies are able to reduce their commercial and technical losses for growth, if a company does not minimise its losses,  such a company is in danger.  It would record   low profitability. The generation companies (GENCOs) generate electricity, wheel it to the  grid and sell it to the distribution companies.  The DISCOs receive, for instance, 100 megawatts of electricity at a cost. If the DISCOs lose one megawatt of electricity, they have to make up for it because nobody would compensate them. Every megawatt the DISCOs loses because of distribution inefficiency is money.”

    He said gas is the bane of the sector, noting that it is affecting the operations of the generation and distribution companies. “Inability of the  power plants to access gas  means they would not be able to generate electricity for the distribution companies,” he added.

    He said the BPE, which conducted post-privatisation monitoring of the DISCOs to assess their performance, learnt they were investing in infrastructure to improve operations.

    ‘’The exercise shows that the DISCOs are investing in infrastructure for growth. Eko Electricity Distribution Company has carried out rehabilitation programmes. The company is buying transformers, cables and others. It has raised $450,000 to improve its operations. Ikeja Distribution Company has increased installations by about 230,000 houses. They go out, meet customers, know their problems and expand their clients’ base, improve efficiency and profitability.   Until we have sufficient gas, that is when people would realise the amount of investments these DISCOs have made to improve the network,” he said.