Discos list conditions for N500bn NASS recapitalisation plan

Electricity distribution companies have listed the conditions for accepting the National Assembly’s N500bn recapitalisation plan for each of the 11 Discos nationwide.

This is as the distribution companies also said they were not under the control of the House of Representatives but the Nigerian Electricity Regulatory Commission.

The PUNCH reports that the House of Representatives on Wednesday mandated electricity distribution companies to undertake a N500bn recapitalisation to enhance their financial stability and ensure they can efficiently meet their obligations to the Nigerian public.

A resolution was passed following the adoption of a motion titled, ‘Need to Address the Activities of Distribution Companies in Nigeria’, sponsored by the member representing the Ifo/Ewekoro Federal Constituency of Ogun State, Ayokunle Isiaka.

In soliciting support for the motion, Isiaka highlighted that DisCos’ recent actions have posed a significant threat to the nation’s economic stability and the welfare of Nigerians.

He expressed concern that despite Nigerians paying for electricity meter installations, distribution companies are still demanding additional payments for replacing these meters under controversial circumstances.

“The House notes that Nigerian consumers paid for electricity meter installation, but DisCos are demanding additional payments for the replacement of these meters under dubious pretences, undermining consumer trust and exacerbating financial burdens,” he said.

“The House is concerned that consumers are being coerced into paying for meters they have already financed, putting additional financial strain on households and businesses already facing economic challenges,” he said.

The lawmaker also expressed concern over what he termed the ‘Sabotage of Economic Development’ by DisCos, where essential services are used against citizens, stifling growth and development.

He added that despite constant regulatory oversight and the Committee on Power’s demands for accountability, DisCos have remained recalcitrant, operating with impunity and disregarding consumer rights.

Following the adoption of the motion, the Speaker, Tajudeen Abbas, urged the DisCos to “undergo recapitalisation of no less than N500bn, and only those with the required financial capacity, which can provide maximum satisfaction to consumers, should be allowed to continue operating.”

The House also directed the Federal Ministry of Power to declare DisCos as non-state actors and take immediate measures to address their “reckless actions” that threaten the nation’s economy.

Additionally, the House mandated its Committee on Power to investigate the activities of DisCos with the intent to hold them accountable and safeguard consumer rights.

The committee was also tasked with carrying out awareness campaigns on consumers’ rights and examining the implementation of strict regulations governing Discos to ensure transparency and fairness in their dealings with consumers.

Our correspondent recalls that the Minister of Power, Adebayo Adelabu, had earlier suggested that DisCos might be recapitalised to ensure enough resources in the power sector, especially for infrastructural development.

However, in an interview with one of our correspondents, the Executive Director, Research and Advocacy, Association of Nigerian Electricity Distributors, Sunday Oduntan, said the government should lead the recapitalisation process by releasing 40 per cent of the N500bn required for each Disco.

According to him, the Federal Government owns 40 per cent of the Discos while the investors own the remaining 60 per cent.

Oduntan said the Discos would wait for the Federal Government to pay its 40 per cent before making commitments if the plan comes to fruition.

“N500bn, fantastic! We will look for 60 per cent, the government should bring in the remaining 40 per cent. If the government does not bring its 40 per cent, we will not pay our 60 per cent.

“Talk is cheap. We need to sit down and plan how to get things done. We want to do what is good, so we want to cooperate with the government.

“The recapitalisation is still a proposition. We will cooperate with them. The private investors in the Discos own 60 per cent, the government owns 40 per cent. So, when you need N500bn, 60 per cent will come from the private investors and 40 per cent will come from the government,” he said.

Oduntan recalled that the Federal Government failed to fulfill its part of an agreement signed with the investors in 2013 after the latter had done their part, saying that would not be allowed to happen again this time.

Similarly, some officials of the Discos told one of our correspondents that they would not listen to anything said by the National Assembly until the NERC gave the order.

The officials, who did not want to be mentioned because of the matter’s sensitivity, said the House of Representatives does not have the sole power to enforce recapitalisation.

“The National Assembly is not our regulator. We take orders from NERC, not the House of Representatives. When NERC talks about it, then we will know the next thing to do. NERC will tell us what to do, not the National Assembly,” an official declared.

Consumers back NASS

Meanwhile, some electricity consumers have backed the National Assembly on the N500bn recapitalisation plan.

Commenting on the development, the National Secretary of the Nigeria Electricity Consumer Advocacy Network, Uket Obonga, said consumers were 100 per cent in support of the National Assembly.

He said the lack of financial capacity of many DisCos was the major reason why several power firms were performing below standard.

“We align with the House of Representatives 100 per cent. The Discos should be forced to raise the N500bn minimum recapitalisation fund, each of them. In fact, we are going to write to the Chairman of the House Committee on Power concerning this,” he stated.

Obonga alleged that the DisCos have not invested in the distribution network, saying they own milk customers of their hard-earned money.

“The Discos should put down N500bn each. They have not invested in the distribution network, rather they only collect money from customers. The revenue assurance in the market is the meters, but the DisCos don’t have these meters. So, how do you intend to get the revenue?

“They have shifted the responsibility of meter provision to the customers now. Is that how a responsible company should behave? The regulator has to join forces with the lawmakers to make this N500bn recapitalisation idea a reality,” he stated.