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Name: Usman Abba Arabi

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Name: Samuel Ekeh
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NERC Fines Ibadan Disco N21m

The Ibadan Electricity Distribution Company (IBEDC) has been fined (N21, 200, 000. 00) Twenty One Million, Two Hundred Thousand Naira Only by the Nigerian Electricity Regulatory Commission (NERC). This is following the utility company’s refusal to obey decisions of the NERC’s Forum Office or treat electricity customer complaints referred to it by the Commission.

The Forum Office is the second level in the Commission’s redress mechanism where complaints from electricity customers that were not resolved at the customer care unit of electricity distribution companies (DISCOs) are referred for settlement. Directive 156 of the Commission reads in part; “following the failure of IBEDC to comply with the request and directive, the Commission issued a Notice to Commence Enforcement to IBEDC, on June 9, 2016 to show cause within ten days, why enforcement action should not be taken against it” on four grounds of misdemeanour.

The four grounds of violation according to NERC’s Directives 156 include Section 63 (1) of the Electric Power Sector Reform (EPSR) 2005 and condition 50 of the Electricity Distribution Licence Terms and Conditions. Both stipulate that a licensee should obey every directive of the Commission.

Others include Condition 4 of the Distribution Licence Terms and Conditions and Section 11 (6) of NERC Customer Complaints Handling: Standard and Procedure Regulations (CCSHP) 2006. Both require a licensee to supply information requested of it by the Regulator as well as implement decisions of the Forum on electricity customer issues “within the time specified in the directives of the Forum.”

However, IBEDC was said to have violated all these four grounds “by not complying with most of the NERC’s Forum decisions in respect of installations of electricity transformers and energising communities; claimed unavailability of funds, capital intensive nature of such projects as some of the reasons for non-compliance.”

IBEDC also “failed to comply with the timeline within which to implement the directives of the NERC Forum as well as the reporting compliance obligation as stipulated in the CCHSP Regulation 2006.”

As such, the Commission in Directives 156 said that breach under Section 63 (1) of the EPSRC Act attracts N10, 000. 00 per day; breach under Section 11 (6) of the CCHSP attracts N10, 000 per day; breach under Condition 4 of the Distribution Licence Terms and Conditions attracts N10, 000. 00 per day and that breach under Condition 50 of the Distribution Licence Terms and Conditions attracts N10, 000 per day.

All sanctions will start counting from February 23, 2015 when the first directive was given by the NERC Forum Office till August 5, 2016 when the Commission’s directives 156 was signed by the Commission’s acting Chairman, Dr. Anthony Akah, mni, and General Manager, Legal, Licensing and Enforcement, Mrs Olufunke Dinneh.

This gives a total of N21, 200, 000 which shall be paid by IBEDC within two weeks starting from August 5, 2016 after which the fine attracts five per cent interest daily until the total fine sum is paid.

Directive 156 further said, “The fines imposed notwithstanding, IBEDC shall comply with all the Directives of the NERC Forum and shall communicate to the Commission, its electricity transformer implementation roll out plan, and the date of the commencement, within two weeks from August 5, 2016.”

The acting Chairman, Dr. Anthony Akah, mni, said that the sanctions were imposed after the IBEDC failed to give satisfactory explanations for some of its actions and that the Commission will continue to act in the best interest of all stakeholders within the value chain in the electricity market.

The Commission, according to him, has intensified efforts at setting up more Forum Offices within the last eight months to handle unresolved electricity complaints from the customer care units of the DISCOs.

Electricity customers were therefore advised to explore the Commission’s redress mechanism as well as appeal to the Commission if they are not satisfied with the Forum decision instead of taking laws into their hands or embarking on avoidable and expensive litigations.

Akah also warned DISCOs to obey decisions of the Forum or appeal to the Commission where they disagree or face sanctions.

Dr. Usman Abba Arabi - Head, Public Affairs Department