J
Joshua Fagbemi
Guest
The Nigerian House of Representatives has introduced an N500bn recapitalization base for Distribution Companies (DisCos). This is to ensure that all electricity distribution companies can adequately meet the needs of their respective customers.
In a motion titled “Need to Address the Activities of Distribution Companies in Nigeria,” sponsored by Ayokunle Isiaka, the member representing the Ifo/Ewekoro Federal Constituency of Ogun State, he emphasized that the Discos’ recent actions have caused a major threat to the nation’s economic strength and Nigerians welfare.
Recall we reported yesterday that the Nigerian Electricity Regulatory Commission (NERC) asked all electricity distribution companies in the country to replace expired prepaid meters for Nigerians free of charge.
This was following claims that some Discos ordered their customers to pay a stipulated fee for the replacement of their Unistar meters.
NERC raises prices of prepaid electricity meters by 40%
Isiaka further reiterated that electricity distribution companies were still charging additional payment for prepaid meter renewal despite charging customers for meter installations.
“The House is concerned that consumers are being coerced into paying for meters they have already financed, putting additional financial strain on households and businesses already facing economic challenges.
The House also notes that Nigerian consumers paid for electricity meter installation, but DisCos are demanding additional payments for the replacement of these meters under dubious pretences, undermining consumer trust and exacerbating financial burdens,” he said.
Also speaking at the House, the All Progressives Congress lawmaker tagged DisCos’ actions as ‘Sabotage of Economic Development’ in which essential services serve as weapons against citizens. He stressed that such results in hindering growth and development.
After the adoption of the motion, the House directed DisCos to “undergo recapitalization of no less than N500bn, and only those with the required financial capacity, which can provide maximum satisfaction to consumers, should be allowed to continue operating.”
NERC raises prices of prepaid electricity meters by 40%
In addition, Speaker Tajudeen Abbas directed the Federal Ministry of Power to declare DisCos as non-state actors and take immediate measures to address their reckless actions that threaten the nation’s financial security.
The House thereby mandated its Committee on Power to monitor DisCos’ activities for accountability, and transparency and to safeguard customer’s rights. The committee was also vested with enlightening Nigerians on their rights and re-examining the regulatory framework guiding electricity distribution companies.
Following the outage between Ikeja Electric and EKEDC and their customers, the NERC and the Federal Competition and Consumer Protection Commission intervened and asked the two DisCos to halt their moves. This was also followed by Unistar’s claim that there was nothing wrong with its devices.
The Ikeja Electric Plc and Eko Electricity Distribution Company already ordered customers on their service to replace their old Unistar prepaid meters before November 14. They stressed that failure to comply will lead to migration into an estimated billing category.
According to the NERC regulatory act – the Nigerian Electricity Supply Industry Act, it is the responsibility of electricity distribution companies to change damaged or expired prepaid meters for their respective customers.
NERC
This was contained in the regulatory body’s official press release on its X handle. “The Nigerian Electricity Regulatory Commission is aware that some Distribution Companies have instructed customers to apply and pay for the replacement of faulty and obsolete meters within their franchise areas,” the statement reads.
This instruction contravenes the Commission’s Order No. NERC/246/2021 on the Structured Replacement of Faulty and Obsolete End-use Customer Meters in the Nigerian Electricity Supply Industry.”
NERC also emphasized that the replacement of meters is not the responsibility of customers. It then urged Nigerians to make a report of any electricity distribution company forcing them to replace their meters upon payment via phone lines and email addresses.
Read More: NERC orders Discos to replace prepaid meters for free.
Earlier in the week, the Managing Director of Azura Power West Africa, Edu Okeke, proposed a $500 million capital base for every electricity distribution company in Nigeria.
He pointed out that just as the Central Bank of Nigeria (CBN) has raised the capital requirements for banks to ensure their stability and capacity to serve, the NERC should mandate a similar benchmark for the DisCos. He insisted that no account should operate without at least N250m in shareholder funds.
He added that the capitalization would ensure the liquidity of the power sector and stabilize the capital structure of the energy distributors.
In a motion titled “Need to Address the Activities of Distribution Companies in Nigeria,” sponsored by Ayokunle Isiaka, the member representing the Ifo/Ewekoro Federal Constituency of Ogun State, he emphasized that the Discos’ recent actions have caused a major threat to the nation’s economic strength and Nigerians welfare.
Recall we reported yesterday that the Nigerian Electricity Regulatory Commission (NERC) asked all electricity distribution companies in the country to replace expired prepaid meters for Nigerians free of charge.
This was following claims that some Discos ordered their customers to pay a stipulated fee for the replacement of their Unistar meters.
NERC raises prices of prepaid electricity meters by 40%
Isiaka further reiterated that electricity distribution companies were still charging additional payment for prepaid meter renewal despite charging customers for meter installations.
“The House is concerned that consumers are being coerced into paying for meters they have already financed, putting additional financial strain on households and businesses already facing economic challenges.
The House also notes that Nigerian consumers paid for electricity meter installation, but DisCos are demanding additional payments for the replacement of these meters under dubious pretences, undermining consumer trust and exacerbating financial burdens,” he said.
Also speaking at the House, the All Progressives Congress lawmaker tagged DisCos’ actions as ‘Sabotage of Economic Development’ in which essential services serve as weapons against citizens. He stressed that such results in hindering growth and development.
After the adoption of the motion, the House directed DisCos to “undergo recapitalization of no less than N500bn, and only those with the required financial capacity, which can provide maximum satisfaction to consumers, should be allowed to continue operating.”
NERC raises prices of prepaid electricity meters by 40%
In addition, Speaker Tajudeen Abbas directed the Federal Ministry of Power to declare DisCos as non-state actors and take immediate measures to address their reckless actions that threaten the nation’s financial security.
The House thereby mandated its Committee on Power to monitor DisCos’ activities for accountability, and transparency and to safeguard customer’s rights. The committee was also vested with enlightening Nigerians on their rights and re-examining the regulatory framework guiding electricity distribution companies.
NERC statement
Following the outage between Ikeja Electric and EKEDC and their customers, the NERC and the Federal Competition and Consumer Protection Commission intervened and asked the two DisCos to halt their moves. This was also followed by Unistar’s claim that there was nothing wrong with its devices.
The Ikeja Electric Plc and Eko Electricity Distribution Company already ordered customers on their service to replace their old Unistar prepaid meters before November 14. They stressed that failure to comply will lead to migration into an estimated billing category.
According to the NERC regulatory act – the Nigerian Electricity Supply Industry Act, it is the responsibility of electricity distribution companies to change damaged or expired prepaid meters for their respective customers.
NERC
This was contained in the regulatory body’s official press release on its X handle. “The Nigerian Electricity Regulatory Commission is aware that some Distribution Companies have instructed customers to apply and pay for the replacement of faulty and obsolete meters within their franchise areas,” the statement reads.
This instruction contravenes the Commission’s Order No. NERC/246/2021 on the Structured Replacement of Faulty and Obsolete End-use Customer Meters in the Nigerian Electricity Supply Industry.”
NERC also emphasized that the replacement of meters is not the responsibility of customers. It then urged Nigerians to make a report of any electricity distribution company forcing them to replace their meters upon payment via phone lines and email addresses.
Read More: NERC orders Discos to replace prepaid meters for free.
House of reps heeded Azura’s proposed $500m capital base for DisCos
Earlier in the week, the Managing Director of Azura Power West Africa, Edu Okeke, proposed a $500 million capital base for every electricity distribution company in Nigeria.
He pointed out that just as the Central Bank of Nigeria (CBN) has raised the capital requirements for banks to ensure their stability and capacity to serve, the NERC should mandate a similar benchmark for the DisCos. He insisted that no account should operate without at least N250m in shareholder funds.
He added that the capitalization would ensure the liquidity of the power sector and stabilize the capital structure of the energy distributors.