… up from average 26.77% achieved by DisCos in 2024

… NERC’s updated enforcement framework to take effect from Q1 2025

Oredola Adeola

With an estimated average resolution rate of 26.77% achieved in 2024, the Nigerian Electricity Regulatory Commission (NERC) has set a new mandate for Electricity Distribution Companies (DisCos) to achieve a minimum 75% resolution rate for customer complaints starting in the first quarter of 2025.

This directive, aimed at addressing prevalent issues such as metering, billing inaccuracies, and service interruptions, was included in NERC’s newly introduced Addendum 1 to the Order on Performance Monitoring Framework for Electricity Distribution Companies.

The addendum, which becomes effective from December 23, 2024, builds upon the original performance monitoring framework issued on July 5, 2024.

Advisors Reports’ check showed that in the third quarter of 2024, DisCos recorded a resolution rate of just 31.15%, resolving only 1,647 of the 5,287 complaints lodged through the NERC-CCU.

While in second quarter of 2024, NERC-CCU received 4,469 as 1,000 complaints were resolved by DisCos (22.38% resolution rate).

This is estimated to an average of 26.77% resolution rate achieved in 2024.

Meanwhile, the NERC’s new framework increases the resolution rate target and shortens the compliance timeline from two months to ensure faster and more efficient responses to customer grievances.

The Commission believes this stricter enforcement will enhance the quality of complaint resolutions at DisCo Customer Care Units (DisCo-CCUs), aligning their operations with international best practices.

NERC has also in the updated enforcement framework included two other Key Performance Indicators (KPIs): Penalty for default in energy offtake and Uniform System of Accounts.

As a follow-up to its earlier directives, the NERC has expanded its performance obligations and customer service guidelines for Electricity Distribution Companies (DisCos) under Addendum 1 to the Order on Performance Monitoring Framework.

The updated framework includes two new Key Performance Indicators (KPIs): penalty for default in energy offtake and compliance with the Uniform System of Accounts.

Advisors Reports’ findings reveal that the directive comes in response to the DisCos’ 2024 energy offtake performance, which fell short of expectations.

In Q1 2024, DisCos recorded an average energy offtake of 3,283.87 MWh/h at their trading points, which dropped to 3,165.93 MWh/h in Q2 2024.

By Q3 2024, the average energy offtake increased to 3,445.13 MWh/h out of an available Point of Connection Capacity (PCC) of 3,807.98 MWh/h, representing an overall performance of 90.47%.

Similarly, the reporting requirement for the Uniform System of Accounts has been revised from a monthly compliance schedule to a two-month compliance schedule per quarter.

Non-compliance with this requirement will trigger enforcement actions, including the potential withdrawal of the “Fit and Proper” approval of the DisCo’s Chief Finance Officer or equivalent position.

NERC emphasized that these measures are designed to promote accountability, operational efficiency, and improved service delivery within the electricity distribution sector.

The Commission reaffirmed its commitment to holding DisCos accountable for meeting regulatory standards and addressing systemic inefficiencies in the power supply chain.

The addendum, which becomes effective from December 23, 2024, builds upon the original performance monitoring framework issued on July 5, 2024.

Advisors Reports’ check showed that in the third quarter of 2024, DisCos recorded a resolution rate of just 31.15%, resolving only 1,647 of the 5,287 complaints lodged through the NERC-CCU.

While in second quarter of 2024, NERC-CCU received 4,469 as 1,000 complaints were resolved by DisCos (22.38% resolution rate).

This is estimated to an average of 26.77% resolution rate achieved in 2024 as NERC mandates DisCos to achieve 75% resolution rate beginning from first quarter of 2025.

Meanwhile, the NERC’s new framework increases the resolution rate target and shortens the compliance timeline from two months to ensure faster and more efficient responses to customer grievances.

The Commission believes this stricter enforcement will enhance the quality of complaint resolutions at DisCo Customer Care Units (DisCo-CCUs), aligning their operations with international best practices.

Advisors Reports further gathered that the updated enforcement framework with two other Key Performance Indicators (KPIs) to include Penalty for default in energy offtake and Uniform System of Accounts are expected to be implemented starting from Q1 2025.

This is just as the Commission continues to emphasize the need for DisCos to prioritize customer satisfaction and service delivery.

As a follow-up to its earlier directives, the NERC has expanded its performance obligations and customer service guidelines for Electricity Distribution Companies (DisCos) under Addendum 1 to the Order on Performance Monitoring Framework.

The updated framework includes two new Key Performance Indicators (KPIs): penalty for default in energy offtake and compliance with the Uniform System of Accounts.

Advisors Reports’ findings reveal that the directive comes in response to the DisCos’ 2024 energy offtake performance, which fell short of expectations.

In Q1 2024, DisCos recorded an average energy offtake of 3,283.87 MWh/h at their trading points, which dropped to 3,165.93 MWh/h in Q2 2024.

By Q3 2024, the average energy offtake increased to 3,445.13 MWh/h out of an available Point of Connection Capacity (PCC) of 3,807.98 MWh/h, representing an overall performance of 90.47%.

Similarly, the reporting requirement for the Uniform System of Accounts has been revised from a monthly compliance schedule to a two-month compliance schedule per quarter.

Non-compliance with this requirement will trigger enforcement actions, including the potential withdrawal of the “Fit and Proper” approval of the DisCo’s Chief Finance Officer or equivalent position.

NERC emphasized that these measures are designed to promote accountability, operational efficiency, and improved service delivery within the electricity distribution sector.

The Commission reaffirmed its commitment to holding DisCos accountable for meeting regulatory standards and addressing systemic inefficiencies in the power supply chain.