The Nigerian Electricity Regulatory Commission (NERC) has issued a notice to Kaduna Electricity Distribution Company (KAEDCO) of its intention to cancel its license over N51 billion energy underpayment.
In the published notice titled: NERC/LC/023, which was signed by the Commissioner, Legal, Licencing and Compliance, Dafe Akpeneye and dated 15th May 2023, the Commission gave the DisCos 60days to respond to the notice.
According to the Commission, the performance review for 2022 showed that the 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 N4.33bn average monthly underpayment, reaching about N51.96bn.
It said the DisCo also under-collected its revenues to the tune of N88.75bn as market shortfall, capital investment allowance (N25.33bn) and allowed operating expenses (N11.46bn) 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.
