NERC and the quest of Electricity Generation and Supply to consumers


    The Nigerian Electricity Regulatory Commission, NERC, has been in the forefront of electrifying Nigerians. This has been an uphill task. Though, the Commission is undaunted by the enormous challenges bedeviling the sector.

    It has recorded significant achievements including the expansion of capacity and network by the issuance of licences for electricity generation, transmission and distribution, as well as the development of industry codes and standards, market rules and a multi-year tariff order.

    NERC is vigorously embarking in sensitization, customer education and stakeholders’ engagement with the aim of addressing power challenges in the Country.


    NERC As An Independent Regulator

    The Nigerian Electricity Regulatory Commission is an independent body, established by the Electric Power Sector Reform Act of 2005 to undertake technical and economic regulation of the Nigerian Electricity Supply Industry. The Commission is to, among others license operators, determine operating codes and standards, establish customer rights and obligations and set cost reflective industry tariffs. The Commission has its headquarters in Abuja, and has currently six zonal offices in the six geopolitical zones of the country.

    Since inception, NERC now headed by the Chairman, Sanusi Garba and his management team have recorded significant achievements including the expansion of capacity and network by the issuance of licences for electricity generation, transmission and distribution, as well as the development of industry codes and standards, market rules and a multi-year tariff order. In addition, the Commission has issued various regulations and orders that have created an attractive and stable electricity market in Nigeria.

    These achievements have been made possible by ensuring that market transactions are rule based and regulatory interventions are preceded by robust consultative and stakeholder engagement processes to ensure transparency, fairness and accountability.

    These qualities of transparency, fairness and accountability are critical to NERC as an independent regulator. The EPSR Act was thorough in ensuring this independence. The Act gave statutory recognition to, and enshrined the principle of regulatory independence, by providing:

    1. For the creation of a regulator by an Act of the National Assembly rather than by subsidiary legislation. Section 31 (1) of which says:

      ” There is established a Commission, which shall be a body corporate with perpetual succession which can sue or be sued in its corporate name and subject to this Act, reform all acts that bodies corporate may by law perform”

      Regulatory decisions are to be taken by a board of Commissioners under section 34 (1) which states that the Commission shall consist of seven full time Commissioners appointed by the President subject to confirmation by the Senate.” These Commissioners, under section 96 of the Act may make regulations on all matters on which the Commissions have powers.

      2. Funding from internally generated revenue, as well as government subventions. Section 52 of the Act deals with funding for the Commission: “The funds of the Commission shall consist of:
      (a) fees, charged and other income accruing to the Commission from licensees and other things done by it in terms of this Act, excluding any fines or penalties recovered pursuant to this Act;
      (b) funds allocated to the Commission by the National Assembly, pursuant to a request by the Commission for additional funds required to meet its reasonable expenditures; and
      (c) such other moneys as may vest in or accrue to the Commission, whether in the course of its operations or otherwise.

      Currently, the Commission collects 1.5% of market revenue as regulatory charge vide the Market Operator. In considering the regulatory fees and charges, it should be noted that:

      i. NERC’s responsibility is to regulate standards of performance for all electricity licensees and monitor performance to ensure that those standards are met and maintained or even exceeded;
      ii. The regulatory charge is used not only to finance the work of the Commission, including monitoring and enforcement, but is also used to finance the activities of other market working groups, panels and committees through which much of the consultative, dispute resolution, rule-making and protection of public interest (especially the rights of customers) is achieved.

      3.     The Commission has the authority to employ the kind of staff it needs, and pay them salaries and allowances that are competitive,that are capable of retaining them and incentivising them.

      Section 5(42) empowers the Commission to pay to the Commissioners such salaries and allowances as they determine, having regard to the advice of the National Salaries & Wages Commission. In making recommendations to the Commission, the National Salaries, Incomes & Wages Commission is to take into account the following principles:

      a.    Specialized nature of the Commission’s work;
      b.    The need for financial self sufficiency of the Commissioners;
      c.    Salaries paid to individuals of equivalent responsibility, experience and skills in the private sector and;
      d.    The nature of the Commissioner’s expenses.

    By the provision of the Act, the Commission has the right to approve appropriate salaries for the Commissioners after due consideration of the recommendations of the National Salaries, Incomes & Wages Commission. The ultimate authority is that of NERC. it is in pursuance of the Act that the pioneer Commissioners approved the salaries and allowances of staff and themselves.

    The Commission believes deeply in the value that its regulatory independence creates for an electricity market that can only thrive in an environment of certainty. To this end, with the benefit of the laws of independence enshrined in its Act, and by recognising that regulatory independence also coexists with respectful interdependence. As the market develops, it is hoped that the Commission can fully remove itself from government funding. In the meantime, we will continue to emphasize on rule based processes, transparency, fairness and continuous consultation.


    Reporting Of Safety Issues

    The Nigerian Electricity Regulatory Commission, NERC, in carrying out its objectives in accordance with Section 32(1) of the Electric Power Sector Reform, EPSR, Act, 2005 is specifically mandated under Section 32(1)(b) & (e) respectively, to maximize access to electricity services, by promoting and facilitating consumer connections to distribution systems in both rural and urban areas as well as to ensure the safety, security, reliability and quality of service in the production and delivery of electricity to consumers.

    Section 81(b) of the EPSR Act further empowers the Commission to develop in consultation with licensees and other interested parties, such technical codes and manuals as may be required for the safe, reliable, and efficient operation of the distribution system.

    Pursuant to the above provisions and in response to the significant number of customer complaints received regarding issues related to the safe delivery of electricity supply to customers, especially to clusters, the Commission considered it necessary to create a platform for monitoring and ensuring the quick resolution of such complaints through enforcement of extant Regulations as mandated.

    Consequently, the Commission wishes to give the following guidance to Communities with issues of safety that may hinder the smooth delivery of electricity supply.

    1.    Communities that experience power supply challenges on safety grounds (e.g. Sagged Conductors, Tilted Poles, Unfenced Substations/Exposed Feeder Pillars, wrongful use of Solid Link fuses, Vegetation on Lines & Substation, Partial Contact/Arcing on Joints and Cobwebs.), except if informed by the Disco, should immediately contact the Distribution Company through the following Safety Officers of various Discos (as applicable) for resolution. This should be followed by writing the Customer Complaint Unit, CCU, and acknowledged by the Distribution Company.

    Responsibilities of the Commission and rights of customers

    EPSR Act, 2005 mandates the Commission to ensure that electricity Operators recover costs on prudent investment and provide quality service to customers.

    To ensure quality service delivery, it is pertinent that electricity customers know their rights as follows:

    1.    All new electricity connections must be done strictly based on metering before connection. That is, no new customer should be connected by a DisCo without a meter first being installed at the premises.
    2.    All customers have a right to electricity supply in a safe and reliable manner.
    3.    All customers have a right to a properly installed and functional meter.
    4.    All customers have a right to properly informed and educated on the electricity service.
    5.    All customers have a right to transparent electricity billing.
    6.    All Un-metered customers should be issued with electricity bills strictly based on NERC’s estimated billing methodology.
    7.    It is the customer’s right to be notified in writing ahead of disconnection of electricity service by the DisCo serving the customer in line with NERC’s guidelines.
    8.    All customers have a right to refund when over billed.
    9.    All customers have a right to file complaints and to the prompt investigation of complaints.
    10.    All complaints on electricity supply and other billing issues are to be sent to the nearest business unit of the DisCo serving the customer.
    11.    If a complaint is not satisfactorily addressed, customers have a right to escalate the issue to the NERC Forum Office within the coverage area of the DisCo.
    12.    Customers have the right to appeal the decision of the NERC Forum Office by writing a petition to the Commission.
    13.    It is the customer’s right to contest any electricity bill.
    14.    Any un-metered customer who is disputing his or her estimated bill has the right not to pay the disputed bill, but pay only the last undisputed bill as the contested bill go through the dispute resolution process of NERC.
    15.    It is not the responsibility of electricity customer or community to buy, replace or repair electricity transformers, poles and related equipment used in the supply of electricity.


    Obligations of Consumers

    Consumers Obligations of electricity are listed to include, paying bills for electricity consumed, providing requirements for connection as stipulated by NERC and DisCo, vigilant protection of electrical installations, cordiality towards electricity workers and customer compliance to the requirements of the Distribution code
    others are paying for electricity used within the stipulated time frame, ensuring receipt of monthly electricity bills if not on prepaid meters and lodge a complaint to the DisCo serving you should you not get your bills, ensuring that metering and other electrical equipment within your premises belonging to the DisCo not tampered with, or by-passed, notifying the DisCo serving you of any tampering or bypass of electricity installations and notifying the DisCo serving you of any outstanding electricity bill before moving into new premises.

    Way forward and Recommendation

    If the consumers are carrying out their obligations and responsibilities and DisCos are faithful in carrying out their duties, the issues surrounding electricity supply to the consumers will be drastically reduced to the barest minimum. However, Energy Frontier strongly believes the issues bedeviling the sector will be a thing of the past in the nearest future.  The good news is that Renewable Energy such as Solar Power is making in role in the country.


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