The Nigerian House of Representatives has launched an inquiry into the Nigerian Electricity Regulatory Commission (NERC) concerning the issuance of numerous dormant operating licenses and allegations of unethical practices and customer extortion by Distribution Companies (DISCOs).
During a session in Abuja, the Ad-hoc Committee, tasked with investigating Nigeria’s power sector reforms and expenditures from 2007 to 2024, voiced serious concerns about the underperformance of DISCOs. This is despite significant Federal Government interventions following privatization, which lawmakers say have failed to produce satisfactory results. Hon. Al-Mustapha Aliyu, Chairman of the Committee, presided over the session.
Estimated Billing Practices Under Scrutiny
A major point of contention was the continued practice of estimated billing, which affects millions of households lacking meters. Hon. Abubakar Fulata condemned estimated billing as one of the “most notorious features” of the power supply subsector, even labeling it as “criminal” in nature. He and other lawmakers shared personal experiences of alleged extortion by officials of the Abuja Electricity Distribution Company (AEDC). The committee also questioned NERC about the status of 288 licenses issued, with reports indicating that 109 of these licenses are currently inactive.
Calls for Government Intervention
Frustration over the persistent failures of the operators who took over the sector’s assets was palpable. Hon. Fulata, expressing his discontent, suggested a drastic measure: “Government should close down all the agencies and take over.” He further highlighted the inefficiency of Band A electricity supply to his own residences in Abuja. Despite paying approximately N50,000 daily, he stated that he was not receiving the minimum 20-hour supply as claimed by NERC.
NERC’s Response and Data
Responding to the allegations, NERC acting Chairman, Mr. Yusuf Ali, revealed that between 6.5 million and 7 million out of the 20 million connected households in the country are unmetered. NERC’s data indicates a 60 percent connection rate out of an estimated 120 million households.
Mr. Ali also clarified the current band classification system and associated tariffs:
- Band A: (20 hours of supply daily) – N209 per kilowatt-hour
- Band B: (16 hours of supply daily) – N65 per kilowatt-hour
- Band C: (12 hours of supply daily) – N60 per kilowatt-hour
- Band D: (8 hours of supply daily) – N55 per kilowatt-hour
- Band E: (4 hours of supply daily) – N50 per kilowatt-hour
He explained that of the 12 licensed electricity distribution companies, 11 are legacy companies formed after the unbundling of the Power Holding Company of Nigeria (PHCN). The 12th, Abba Power Limited, was established following a Bureau of Public Enterprises (BPE) transaction to serve the Aba ring-fenced area in Abia State. NERC has also issued one transmission service provider license to the Transmission Company of Nigeria (TCN) and one system operations license to the Nigerian Independent System Operator.
Challenges in the Power Sector
The NERC acting Chairman acknowledged that many industries have resorted to embedded or captive power generation because the national grid is unreliable. He explained that the grid does not provide the industry-grade electricity required, forcing companies to generate their own power to protect sensitive equipment.
NERC Commissioner for Legal, Licensing & Compliance, Mr. Dafe Akponeye, stated that the power assets were sold based on share sale agreements, but the Federal Government has allegedly failed to meet some of its obligations. He added that operators were initially promised cost-reflective tariffs, but tariff freezes and National Assembly resolutions have prevented this.
Lawmakers Demand Accountability
When questioned about the performance of the DISCOs, Mr. Akponeye declined to give a direct assessment, arguing that the sector is interdependent and “a single party cannot be singled out.” This response drew sharp criticism from Hon. Fulata, who stated: “If you are sitting on the fence, you cannot be a judge. A judge cannot sit on the fence. You have to deliver a judgment on the performance of the DISCOs.”
Lawmakers also questioned the issuance of 10-year operating licenses—and subsequent 5-year renewals—to the 12 DISCOs, despite widespread complaints of poor electricity supply.
Hon. Aliyu directed the Bureau of Public Enterprises (BPE) to submit the performance reports of all DISCOs to the Ad-hoc Committee within 48 hours for further legislative action.
