The Federal Government has issued marching orders to its agencies regulating the power sector, directing the Nigerian Electricity Regulatory Commission, NERC, to withdraw licenses of non-performing electricity distribution companies, DisCos.
The government accused the DisCos of not doing enough to improve supply despite the availability of power on the national grid.
Minister of Power, Adebayo Adelabu who stated this during a meeting with the head of the agencies in Abuja said the distribution segment remains the weakest link in the electricity supply value chain.
Adelabu stressed that NERC must look for creative ways of getting the DisCos to improve supply including the imposition of stiff sanctions on utilities which fail to pick their allocations and outright cancellation of licenses.
He insisted that the franchise areas covered by the DisCos were too large, adding the government would pursue a restructuring that would create smaller DisCos with companies restricted to one state each.
“Distribution is our weakest point and it is the closest to the consumers. If we don’t get distribution right, to Nigerians, we’re not doing anything. So, efforts need to be put on this. In fact, we must intensify our efforts in ensuring that we address all issues relating to distribution.
“It is true that the distribution companies are in the hands of the private sector. We don’t have direct control. But we need to compel them for performance. They must perform. If they do not perform, all our effort in generation, in transmission is zero. I’ve also had a meeting with the Chairman of NERC on how we’re going to address these performance issues of the electricity distribution companies across the nation.
“Why we have new policies in our power sector policy framework, which we’re going to finalize to address long-term issues in distribution, we must proffer short-term solutions to the lingering crisis. Before we get to that, we’re talking about the issue of the capitalization of the discourse, for them to inject funds, to improve infrastructure.
“We are talking about issues of restructuring the DisCos along state lines, to make them manageable in size. Also, issuing new franchises to smaller DisCos to take over areas not being served by the existing ones or that have been underserved by the existing ones.
“I’ve said it before now that non performance of DisCos in terms of epileptic power supply qualifies as a basis for revocation of license. Any DisCo that is found-wanting will be severely dealt with because their actions or inactions directly affect the performance of the sector”.
