The Nigerian Electricity Regulatory Commission (NERC) has introduced an addendum to its Order on Performance Monitoring Framework for Electricity Distribution Companies (DisCos), aimed at enhancing operational efficiency and accountability.
The Addendum – 1, issued on December 23, 2024, introduces significant updates to the Key Performance Indicators (KPIs) originally stipulated in the Order issued on July 5, 2024.
The revised Key Performance Indicators (KPIs) will take effect from the first quarter of 2025.
This was contained in a statement posted on X (formerly Twitter) on Tuesday.
This initiative is part of NERC’s commitment to ensuring that DisCos deliver improved energy services to consumers while maintaining high standards of accountability and customer satisfaction.
“The Order seeks to ensure compliance with the Key Performance Indicators (KPIs). These include accountability by the DisCos’ management, increased operational performance, improved energy delivery to customers, and customer satisfaction,” the statement read.
Key Updates in the Addendum
The addendum revises three critical KPIs to address gaps in compliance and operational performance:
- Energy Offtake Compliance
- Revised Penalty Timeline: DisCos must now ensure they offtake at least 95% of available nominated energy for two out of three months per quarter.
- Penalty for Non-Compliance: A failure to meet this target will result in a 5% reduction in the DisCo’s administrative operational expenditure for the subsequent quarter. This adjustment aims to incentivize DisCos to optimize energy delivery to customers.
- Financial Reporting Standards
- Extended Reporting Period: Compliance with the Uniform System of Accounts has been revised from a monthly to a two-month per quarter basis.
- Enforcement Action for Default: Non-compliance for two months within a quarter will trigger stringent enforcement measures, including the possible withdrawal of the “Fit and Proper” approval for the DisCo’s Chief Finance Officer or equivalent positions.
- Customer Complaints Resolution
- Enhanced Resolution Target: The timeline for resolving customer complaints via the NERC Contact Centre and NERC Headquarters has been updated. DisCos must now achieve a 75% resolution rate for all complaints within a quarter, reflecting an increased focus on customer satisfaction.
Implementation and Enforcement
To ensure seamless compliance, NERC will issue Rectification Directives for all outstanding issues related to the revised KPIs for Q3 and Q4 of 2024. The enhanced enforcement framework, as outlined in Addendum – 1, will officially take effect in Q1 2025.
NERC’s proactive approach to refining the regulatory framework demonstrates its dedication to fostering transparency and efficiency in Nigeria’s electricity distribution sector. By holding DisCos to higher standards of accountability and performance, the Commission aims to address long-standing challenges in energy delivery and customer service.
