Electricity regulator rises from slumber, sanctions erring operators

... Abuja pays N300m in fines, PPIP LVI and Cummins Power ordered to pay millions for infractions

Cummins Power Generation Nigeria Limited (CPGNL) has become the third company ordered to pay millions of naira in fines for infractions against its licence in an indication that the electricity regulator is now awakening to its responsibility of regulating Nigeria’s floundering electricity sector.

In an order published May 28, the Nigerian Electricity Regulatory Commission (NERC) ordered Cummins Power Nigeria Ltd to pay as much as N3 million in fines for noncompliance with the Electric Power Sector Reform Act and terms of its off-grid generation licences, as well compensate

Ikeja Electric for lost revenue for encroaching on the Disco’s distribution network.

This month alone, NERC has meted out sanctions on Abuja and PIPP LVI Discos for different infractions. While Abuja Disco has been ordered to pay N300 million in fines over cases of electrocution in its franchise areas and to conduct a detailed safety audit of its network to prevent further infractions, PIPP LVI, like Cummins, is on the hook for encroaching on Eko Disco’s distribution network and tampering with its distribution infrastructure.

Cummins applied for an off-grid electricity generation licence in 2016 to supply power to the Nigerian Carton and Packaging Manufacturing Company Limited (NICAPACO), liupeju, Lagos and was granted.

But Ikeja Electric filed a petition against the company on August 9, 2018 accusing it of encroaching on its network by supplying customers on Ikeja Electric’s priority feeders without the approval of the Commission. Ikeja Electric further objected Cummins’ application for an off-grid licence on grounds of encroachment into the Disco’s distribution network and tampering with distribution infrastructure.

According to NERC, its investigation panel confirmed that Cummins had constructed distribution infrastructure without the Commission’s approval and ordered the company to defend its actions in January this year.

In its defence, Cummins said when it filed an application for a licence to supply power to NICAPACO, it did not receive an objection within the specified period and it did not receive any correspondence from NERC that any objections had been received. So it took NERC’S silence as acceptance, in line with the Executive Order 01 issued by the Vice President for the purpose of ease of doing business. Cummins thereafter entered into a supply arrangement with NICAPACO and commenced supply of offgrid electricity.