NERC Proposes Sanctions for Breach of Industry Rules

The Nigerian Electricity Regulatory Commission (NERC), Thursday rolled out a number of strict administrative sanctions, which were contained in the draft electricity industry (enforcement) regulations and with which it expects to deploy in ensuring compliance to operational codes in the Nigerian Electricity Supply Industry (NESI).
Included in the variety of administrative sanctions available to the commission against any operator that is found guilty of breaching any of NESI’s operational rules, is a provision for the imposition of an administrative fine of N10,000 per minute for each occasion of guideline breach by any of the operators.
The draft document, which was presented to key industry stakeholders at a consultative meeting organised by NERC in Abuja, indicates that for each of the minutes that an operational guideline breach may have occurred in the sector, the offender is liable to pay N10,000 per minute upon a satisfactory conclusion of an investigation on the reported breach.
Apart from the N10,000 administrative fine that is being proposed in the guideline, NERC has equally elected to among other possible enforcement instruments, suspend the operational licences of guilty operators, request for changes in the boards and management of licensees, cancel licences and seal off operational premises of offenders.
However, the expected processes for initiation of an enforcement proceeding by the commission would include, receipt and investigation of a complaint for breach of operational guidelines, submission of investigative report, institution and review of an order for compliance to the guilty party and finally enforcement of administrative sanctions.
The Chairman of NERC, Dr. Sam Amadi, stated that the regulation had become necessary in the wake of government’s handover of operations in NESI to private investors.
Amadi explained that the regulations were meant to create, promote and preserve efficiency in NESI, facilitating swift investigation and by resolution of incidences of regulatory non-compliance, at the same time establish a system for deterrence and sanctions for acts or omissions, which constitute disregard to industry regulations.
NERC’s commissioner in charge of legal, licensing and enforcement, Steven Andzenge, who gave reasons for NERC’s poor enforcement drive, also stated that the commission had decided to introduce the Nigerian contents initiatives in the operations within NESI partly to avoid earlier mistakes that were made in the country’s oil, gas and telecommunications sectors.
Andzenge in his response to a question on the efficiency of operational regulations earlier put out by the commission said: “We had challenges with enforcement in the past because what we had before now was that the CEOs of these companies were actually appointed by the government and when you sanction them, they come out to say that they don’t have money to pay for the penalties.
We are however confident that we can do better now that the private sector is in charge of the sector because no CEO will like to put the name of his company and its board in disrepute.”
He further noted that the new regulation on national content development for NESI would provide the sector with an early guide against unwholesome practices in the sector that could deprive Nigerians maximum benefits that are expected from the growth of the country’s electricity market.

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