NERC Directs De-Rating Following Seven Days of Non-Performance

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Distribution firms in Nigeria are now required by the Nigerian Electricity Regulatory Commission (NERC) to degrade automatically any Band A feeder that does not meet the minimum standard of 20 hours of electricity per day for seven days in a row.
The Service Delivery Commitments for every DisCo were outlined in this order, which was released by NERC as a Supplementary Order to the Multi-Year Tariff Order (MYTO) 2024 and took effect on April 3, 2024.

According to NERC, if a disco fails to provide the promised level of service on a Band A feeder for two days in a row, the disco is required to explain the problem and keep affected customers informed about when service will be restored to the promised level. This information must be published on the disco’s website no later than 10 am the following day.

An order was issued by NERC to automatically downgrade a Band A feeder to its recorded level of supply if the Disco fails to meet the committed service level for seven consecutive days, according to the applicable framework.

Starting with Band A feeders on April 3, 2024, the Commission additionally ordered all Discos to establish a quick response team to guarantee efficient service delivery throughout the minimum supply hours promised to each service band.

It should be remembered that on Wednesday, NERC announced the approval of a 240 percent increase—from around N66 to N225 per kilowatt hour—in the power rate for Band A customers across the country’s distribution firms (DisCos).
Musliu Oseni, vice chairman of NERC, has already stressed that the tariff hike will solely impact consumers across the nation who have a power supply of 20 hours or more.

Inflation increased by 12% from 28.2% in January 2024 to 31.72% by March 2024, the exchange rate increased by 59% from N919.39/$1 to N1,463.30/$1, and the generation cost increased by 63% from N63.8/kWh to N103.9/kWh, according to data in the MYTO 2024 Supplementary Order.
A 34% increase from N6.8/kwh to 9.1/kwh was recorded in transmission and administrative costs, while an 11% increase from $2.18/MMBTU to $2.42/MMBTU was recorded in wholesale gas to power rates.

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