The Nigerian Electricity Regulatory Commission (NERC) said that it has notified the Kaduna Electricity Distribution Company (KAEDCO) of its decision to revoke its (KAEDCO) licence after 60 days over N51 billion energy underpayment, among others.
The NERC in the published notice tagged NERC/LC/023, signed by the Commissioner, Legal, Licencing and Compliance, Dafe Akpeneye, and dated May 15, 2023, read, “Take note that KAEDCO is hereby given 60 days from the date of this notice to show cause why the electricity distribution licence should not be cancelled in accordance with section 74 of EPSRA.”
The NERC performance review for 2022 showed that KAEDCO only paid 13.85% of its minimum payment obligation to the Nigerian Bulk Electricity Trading Plc (NBET) and the Market Operator (MO) with a N4.33bn average monthly underpayment, reaching about N51.96bn.
KAEDCO also under-collected its revenues to the tune of N88.75bn as market shortfall, capital investment allowance (N25.33bn) and allowed operating expenses (N11.46bn) during the period.
Meanwhile, NERC highlighted several regulatory interventions for the DisCo, noting that after KAEDCO failed to provide a credible plan for the financial sustainability of the utility, the Commission issued a notice of imminent regulatory intervention dated March 23, 2023 to the core investors – Africa Export Import Bank, Fidelity Bank Plc and Bureau of Public Enterprises (BPE) with 14 days to present their plan.
The Commission noted that KAEDCO’s investors in April sought more time from it without commitment to pay for energy remittance defaults.
On April 14, 2023, NERC met with the investors to discuss their final plan proposals and how to reduce their debts by N1 billion in one year, a N2bn stabilisation loan to cut the DisCo’s N4.3bn shortfall by N250 million immediately, among others.
The firm submitted the proposed plan by April 17th but NERC said it reviewed the plan and it failed to meet the obligations and moves to revoke the DisCo’s licence.