The Nigerian Electricity Regulatory Commission (NERC) has notified Kaduna Electricity Distribution Company (KAEDCO) of its intention to cancel its licence after 60 days over N51 billion energy underpayment, among others.
The published notice tagged: NERC/LC/023, signed by the Commissioner, Legal, Licencing and Compliance, Dafe Akpeneye and dated 15th May 2023, read thus: “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.”
According to NERC performance review for 2022, 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. It 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.
NERC highlighted several regulatory interventions for the DisCo, noting that after KAEDC failed to provide a credible plan for the financial sustainability of the utility, it issued a notice of imminent regulatory intervention dated 23 March 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.
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KAEDC’s investors in April sought more time from NERC without commitment to pay for energy remittance defaults. NERC then met with the investors on 14 April 2023 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 then submitted the proposed plan by 17th April but NERC said it reviewed the plan and it failed to meet the obligations and moves to cancel the DisCo’s licence.
