The House of Representatives on Wednesday called for a minimum of N500 billion recapitalisation threshold for the 11 Electricity Distribution Companies (DisCos) in the country to remain operational.
In response to this, DisCos have listed the conditions for accepting the plan, saying they were not under the control of the House of Representatives but the Nigerian Electricity Regulatory Commission.
Reps said the move was to enhance DisCos 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.
Initially, 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 The Punch, 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.
SOURCE: economicconfidential.com