Why SERCs Must Hold DisCOs Accountable, End Consumers Exploitation To Improve Power Supply
Since the privatization of Nigeria’s electricity sector in 2013, Distribution Companies (DisCoS) have operated with little regard for consumer rights. As the only entities in the electricity value chain that deal directly with final consumers, DISCOS are responsible for distributing electricity to households and businesses. While transmission company can occasionally supply electricity directly to eligible customers, DISCOS hold the primary mandate for distribution.
However, instead of adhering to market rules and agreements designed to ensure quality service, DisCoS have consistently violated consumer rights. This is largely due to widespread ignorance among Nigerians about the laws protecting their rights in the electricity sector. Also, until recently, the centralization of regulatory powers in the Nigerian Electricity Regulatory Commission (NERC) made it difficult for even informed consumers to lodge complaints and ensure enforcement.
The Electricity Act of 2023, which empowers states to participate fully in the electricity market, from generation to distribution promises considerable changes. This is because with state-level regulation, consumer rights are likely to be better protected, but only if Nigerians are aware of these rights.
As part of the privatization agreement, DisCos are obligated to invest in infrastructure. However, many of them have shifted this responsibility onto consumers even when they receive financial supports in form of grants and intervention funds from government. Not only have they failed to improve the infrastructure they inherited, they have also neglected its maintenance. DisCos have repeatedly forced customers to purchase distribution assets such as transformers, poles, and cables, despite NERC’s orders prohibiting this practice. The only exception is when a clear agreement exists between DisCos and customers outlining how consumers can recover their investment. However, DisCos have always forced customers to buy these assets and then claim ownership without offering any recovery plan.
A friend shared an annoying experience with her DisCo She requested a replacement for her obsolete metre and she was forced to commit to bearing the cost without any recovery plan. The DisCo removed the metre, promising to replace it, but failed to do so for months. After her initial complaint, they installed a single-phase metre instead of the multi-phase one she previously had. When she complained again, the DisCo responded with an exorbitant bill, over 1,000% higher than her typical consumption during the period when her metre was functional. Despite citing NERC Order No. NERC/246/2021, which prohibits DisCos from charging customers for replacing obsolete metres, the DisCo installed a new metre but included the disputed bill. As a result, she has been without electricity for three weeks. This matter is now headed to the state regulator.
Many Nigerians face similar fraudulent practices by DisCos. Imagine if a transmission company says DisCos must replace a faulty transformer in a transmission substation before it wheels power to them for distribution. This is precisely what DisCos do to consumers. Yet, when the Transmission Company of Nigeria fail to meet its obligations most times due to vandalism, it pays billions in penalties to Generation Companies for Transmission Loss Factor and to DisCos for breaching Service Level Agreements (SLAs). Conversely, when DisCos fail to deliver quality service or ensure availability, consumers receive no compensation.
SLAs outline consequences for both Transmission Company of Nigeria, TCN and DisCos when standards are not met. However, DisCos often exploit consumers lack of awareness while they’re backed by NERC to consistently hold TCN to account. DisCos are exploring this because they know and understand these laws in the market. But for the average Nigerian in the street, who would tell them that DisCos also owe them certain obligations that if not met, compensation needs to be given?
How many Nigerians know that DisCos must notify them before disconnecting their power? How many are aware that DisCos are obligated to supply electricity for a minimum number of hours, with penalties for failure to comply? How many know that DisCos cannot disconnect consumers without notice or take their cables away only to ask them to buy new ones during reconnection? How many Nigerians know that it is DisCos statutory obligation to provide distribution assets like cables, poles and transformer or fix/repair any damaged or stolen ones without monetary contributions from their customers?
DisCos, like the transmission company can only suspend their obligations and escape penalties in extraordinary circumstances, such as unforeseeable and unavoidable external events, by declaring force majeure. However, this is not a blanket excuse to evade liability. When a force majeure event occurs, DisCos must report it within a specified period, or they remain liable. Unfortunately, most Nigerians are ignorant of these protections, allowing DisCos to operate as if they are doing consumers a favour by supplying electricity.
This is why State Electricity Regulatory Commissions (SERC) must take educating Nigerians about their rights and privileges more seriously. Improved electricity supply will not come just from building power plants, transmission networks, or licencing new DisCos in states. While these are critical tools, holding DisCos accountable and ensuring consequences for service failures will keep them motivated to deliver.
With states taking over regulatory oversight from NERC, regulators will be closer to the people thereby improving access to complaint mechanisms and enforcement. However, for consumers to voice grievances, they must understand their rights. This is why SERC should invest in Electricity Rights Education to inform Nigerians about their entitlements, DisCos obligations, and applicable penalties.
-Inyali Peter, Ph.D.
Note: The opinions expressed here are solely those of the author and do not represent any other interests or entities with which he is associated.
