The Kaduna Electricity Distribution Company (KAEDCO) is poised to lose its operating license if it fails to effect over N51 billion energy underpayment, the Nigerian Electricity Regulatory Commission (NERC) has warned.
The warning is contained in a notice No. NERC/LC/023, signed by the Commissioner of Legal, Licencing and Compliance, Dafe Akpeneye and dated 15th May 2023.
According to the notice, the Commission gave the Kaduna DisCos 60 days within to respond to the notice or risk losing its operating licence.
NERC stated that the performance review for 2022 showed DisCo only paid 13.85% of its minimum payment obligation to the Nigerian Bulk Electricity Trading Plc (NBET) and the Market Operator (MO) with a N4.33 billion average monthly underpayment, reaching about N51.96 billion.
It added that the DisCo also under-collected its revenues to the tune of N88.75 billion as market shortfall, capital investment allowance (N25.33 billion) and allowed operating expenses (N11.46 bilionn) during the period.
The Commission said it afforded KAEDCO management team several opportunities to develop and present a clear pathway towards recapitalisation and improvement of operational efficiency and sustainability of the utility.
But, it said the DisCo have been unable to present a credible plan that would yield the desired results.
The Commission said it issued a notice of imminent regulatory intervention dated 23 March 2023 to the core investors – Africa Export Import Bank, Fidelity Bank Plc and Bureau of Public Enterprises (BPE) with 14 days to present their plan.
KAEDC’s investors in April sought more time from NERC without commitment to pay for energy remittance defaults.
NERC said it then met with the investors on 14 April 2023 to discuss their final plan proposals and how to reduce their debts by N1 billion in one year, a N2bn stabilisation loan to cut the DisCo’s N4.3bn shortfall by N250 million immediately, among others.
The firm then submitted the proposed plan by 17th April but NERC said it reviewed the plan and it failed to meet the obligations and moves to cancel the DisCo’s licence.
