Despite the liquidity crisis in the power sector, the Nigerian Electricity Regulatory Commission (NERC) paid N503.442 million as wages and salaries to its 172 staff in 2018, which is 46.5 per cent higher than the N235.948m it paid to same staff in 2017.
Industry records shows that regulatory bottlenecks, lack of network investments, non-implementation of six reviews of the Multi Year Tariff Order (MYTO) 2015 and past unrealistic projections for power generation and distribution have caused a shortfall of over N1.3 trillion in 2019.
Daily Trust analysis is based on the Commission’s 2018 Annual Report and Audited Financial Statements for the year ended December 31, 2018, released in June 2019.
NERC revenue rose by N198m in 2018.
The audit report shows that NERC got N5.535 billion in 2018 financial year which is N198m higher than N5.337bn it got in 2017.
The breakdown showed it should get N10.351bn from operating fees on electricity (its 1.5% electricity market fee built into the electricity tariff being paid by all consumers across the 11 DisCos).
However, it recorded N5.314bn uncollectible operating fees due to the liquidity crisis in the electricity market. Upon situation improvement, NERC hopes to get that fund. It then made N498.9m from licences and fees.
Among its other incomes, the regulatory agency for the power sector got N663,000 interest on its fund, N25.979m from insurance and ITF claims.
The Federal Government gave subvention (budgetary) of N355.709m while NERC got N76.600m as grant from MacArthur Foundation. It got N45.750m grant from the Foundation in 2017.
Remuneration rose by 46% in 2018
Our analysis further shows that NERC paid N503m salaries for 172 staff in 2018, which is 46.5 per cent higher than N236m the 172 staff received in 2017. The commission also paid N3.09bn for other unexplained benefits and allowances to the same staff which was N289m higher than similar pecks it paid in 2017.
The commission also spent N1.337 billion on staff pension contributions and benefits. The breakdown of this shows that NERC spent another N621m on post-employment benefit expenses, defined contribution plans (for staff pensions), and another N716m on post-employment benefit expense and defined ‘benefit’ plans.
Explaining these payments, the report said it was required to contribute a payroll cost for staff retirement to Pension Fund Administrators (PFAs).
For the defined benefit plans, NERC said that was a separate fund that is legally separated from the entity for post-retirement benefits. Staff who are between five and 15 years of service could earn 120% of their annual gross pay, those from 15 years get 160% of their gross remuneration while others who serve for 25 to 35 years get 200% of their gross pay.
How salaries are paid
On its staff ranking and how they are paid, the report said there are 172 staff for years 2017 and 2018. They consist of 24 junior staff that earn up to N5 million annually. It had six intermediate staff in 2018 earning between N5m to N10m.
The senior staff gulp more of the salary and allowances as NERC harboured 109 of them in 2018 as against 71 it had in 2017. This category have their earnings split in two sub-category: those who are fresh senior staff (57 of them) earn between N10m and N15m annually while the 52 others earn N15m to N20m annually.
The next category is the 26 management staff splint in two: the fresh 10 management staff get N20m to N30m as remuneration while 16 other management staff receive N30m to N40m annually.
The seven commissioners, including the chairman, Prof. James Momoh and his vice chairman, Engr. Sanusi Garba, receive remunerations that are N40m and above annually.
