The Nigerian Electricity Regulatory Commission (NERC) has unveiled an addendum to its Order on Performance Monitoring Framework for Electricity Distribution Companies (DisCos), marking a decisive step toward improving operational efficiency and accountability in the sector.
This development, announced via a statement on X (formerly Twitter) on Tuesday, December, 2024 introduces substantial updates to the Key Performance Indicators (KPIs) originally set out in an earlier Order issued on July 5, 2024.
The revised KPIs are scheduled to take effect in the first quarter of 2025. NERC emphasized that this initiative reflects its unwavering commitment to ensuring DisCos deliver enhanced energy services to consumers while adhering to elevated standards of accountability and customer satisfaction.
“The Order seeks to ensure compliance with the Key Performance Indicators (KPIs). These include accountability by the DisCos’ management, increased operational performance, improved energy delivery to customers, and customer satisfaction.”.
The Nigerian Electricity Regulatory Commission (NERC)
The addendum refines three critical KPIs to address persistent gaps in compliance and operational performance: The first is energy offtake compliance, a revised penalty timeline where DisCos are now required to offtake at least 95% of available nominated energy for two out of three months per quarter.
Another one is the penalty for non-compliance, in which failure to meet this threshold will result in a 5% reduction in DisCo’s administrative operational expenditure for the subsequent quarter. This measure aims to incentivize optimization of energy delivery to customers.
Financial Reporting Standards, Customer Complaints Resolution
Here, the Nigerian Electricity Regulatory Commission (NERC) announced an extended reporting period , in which the compliance requirement for the Uniform System of Accounts has been revised from a monthly to a two-month per quarter basis.
Announcing its enforcement action for default, the Nigerian Electricity Regulatory Commission (NERC) emphasized that DisCos failing to comply for two months within a quarter will face stringent enforcement actions, which may include the withdrawal of the “Fit and Proper” approval for the Chief Finance Officer or equivalent positions within the organization.
Additionally, the Nigerian Electricity Regulatory Commission (NERC) announced that the timeline for resolving customer complaints through the NERC Contact Centre and NERC Headquarters has been revised. DisCos must now achieve a 75% resolution rate for all complaints within a quarter, underscoring the importance of customer satisfaction.
Implementation and Enforcement
To facilitate seamless compliance, NERC will issue Rectification Directives addressing outstanding issues related to the revised KPIs for the third and fourth quarters of 2024. The enhanced enforcement framework outlined in Addendum – 1 will become operational in Q1 2025.
NERC’s proactive measures are designed to instill transparency and efficiency across Nigeria’s electricity distribution sector. By holding DisCos to higher accountability and performance standards, the Commission aims to resolve long-standing challenges in energy delivery and customer service.
This initiative not only signals a shift in regulatory expectations but also underscores NERC’s determination to elevate the quality of electricity distribution for consumers nationwide.
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