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N2.9bn metering fund: Ex-power firm chiefs may face EFCC

By BusinessNews Staff on June 28, 2014

The Nigerian Electricity Regulatory Commission has described as criminal the lack of accountability in the N2.9bn metering intervention fund created by the Federal Government in 2011, saying the matter will be reported to the Economic and Financial Crimes Commission for proper investigation.

The Chairman, NERC, Dr. Sam Amadi, disclosed this on Thursday when he paid a courtesy visit to the headquarters of Punch Nigeria Limited in Ogun State.

The sum was given to the electricity distribution firms by the Federal Government in 2011 as part of the subsidy for package for electricity consumers to closing the huge gap of customers without meters.

However, the impact of the intervention has not been felt with millions of electricity consumers without meters, leading to the power distribution firms resorting to estimated billing, whereby majority of customers pay for what they don’t consume.

Amadi described the development as a crime against the consumers, saying the issue remained important and could not be ignored.

NERC had, in the past, blamed the electricity distribution companies for jeopardising efforts to close the metering gap despite the provision of the metering intervention fund by the government. This was before the firms were privatised.

“We are still going to write to the EFCC and other relevant agencies. It is a crime against the consumers. Since time does not run against crime, we will still go ahead and prosecute those who got the money. The money was given to the Discos before we came on board,” Amadi said.

He said a meeting had been called to address the issues surrounding the fund, which was part of the subsidy incorporated into the Multi Year Tariff Order.

“We told them (Discos) to submit to us a report on how the money was spent; and only half of the Discos did. For those that submitted, their books were not convincing; so, we disallowed them,” he said.

According to the NERC boss, the money did not go through the commission, hence it cannot say how it was allocated.

He described the metering situation in the country as a legacy crisis, saying that NERC’s condition that the Discos could only review their tariff when they had presented a metering plan, which must be implemented within 18 months, was rejected as the firms argued that they were experiencing rising personnel cost and were not generating much revenue.

The situation, he said, had continued to promote estimated billing by the Discos.

“This issue of estimated billing is beyond our control because the regulator don’t get to know until the affected consumer reports,” he said.

On the current structures for providing gas to power plants across the country, Amadi admitted that mistakes had been made over time, adding that Nigeria should not be talking about 4,000 megawatts of power generation or even 20,000MW at this period in her history.

According to him, it is now mandatory that gas supply arrangements must be well spelt out before power plants can be approved for construction in different locations.

He said licences for the generation of over 25,000MW of electricity had been issued by the commission, but lamented that a lot of the licences had yet to be put to use.

NERC, Amadi noted, was planning to make it compulsory for generation and distribution companies to make public details of their operations and conduct public hearings for customers within their networks on periodic basis so as to prevent possible abuses by the power firms, while promoting effective service delivery and customer satisfaction.

Amadi said, “We need to mobilise consumer awareness. For now, we are regulating the industry and doing advocacy at the same time. This is not sustainable.

“This is a market of voice, and the stronger voice takes the day. We need to look at the future of energy in this country. If we don’t act right, the consequences will be inescapable.”

He stressed the need for the electricity market to be more competitive, saying that increased competiveness would make regulation stronger, while discouraging inefficiency and mediocrity in the system.

[Punch]

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