Following 60 days of nearly N51 billion in energy underpayment, among other reasons, the Nigerian Electricity Regulatory Commission (NERC) has stated that it intends to revoke the license of Kaduna Electricity Distribution Company (KAEDCO).
Take note that KAEDCO has 60 days from the date of this notice to “show cause” why the electricity distribution license should not be revoked in accordance with Section 74 of the EPSRA, according to a published notice titled NERC/LC/023, dated May 15, 2023, from Dafe Akpeneye, the Commissioner, Legal, Licencing and Compliance.
According to the NERC performance review for 2022, KAEDCO only paid 13.85% of the minimum amount owed to the Nigerian Bulk Electricity Trading Plc (NBET) and the Market Operator (MO), an N4.33 billion average monthly shortfall that eventually amounted to roughly N51.96 billion, the report stated.
According to the report, KAEDCO failed to collect enough money from the market to cover its shortfall of N88.75 billion, as well as the N25.33 billion in capital investment expenses and the N11.46 billion in authorized operating expenses, during the relevant period.
The document explained that on March 23, 2023, KAEDCO issued a notice of impending regulatory intervention to the utility’s core investors, Africa Export Import Bank, Fidelity Bank Plc, and Bureau of Public Enterprises (BPE), giving them 14 days to submit a plan. As a result, NERC highlighted several regulatory interventions for the DisCo.
The report states that NERC and the investors discussed their final plan proposals on April 14, 2023, and how to reduce their debts by N1 billion in one year with a N2 billion stabilization loan to immediately reduce the DisCo’s N4.3 billion shortfall, among other things. It also states that NERC and the investors discussed how to reduce their debts by N1 billion in one year with a N2 billion stabilisation loan.
The report stated that the company subsequently presented the suggested plan by April 17th, highlighting the fact that NERC claimed to have studied the plan and determined that it did not satisfy the requirements, and moved to revoke the DisCo’s license.
