The Nigerian Electricity Regulatory Commission (NERC) has established new guidelines to guarantee a transparent and accountable framework for electricity revenue collection.
The fresh regulatory directive, titled “Guidelines on Registration and Engagement of Third-Party Collection Service Providers”, was released and signed by the NERC Chairman, Sanusi Garba.
The new directive, which was already effective as of the time of its release, is anchored on the powers conferred upon the Commission by Section 226 of the Electricity Act 2023.
Electricity Distribution Companies in states with no electricity market are the major target of the guidelines, and NERC has announced that the decision aligns with the Federal Government’s strides to guarantee a cashless economy in Nigeria.
According to Sanusi, the guidelines will help to boost controls over electricity revenue inflows in the Nigerian Electricity Supply Industry, and only 3rd-party Collection Service Providers with valid Central Bank of Nigeria permits, verified integration with the Nigeria Inter-Bank Settlement System, and strict tax compliance will be allowed to operate.
He noted that DisCos have to be guided better when it comes to the registration of third-party collection agents, including applicable service charges, stating that the guidelines will go a long way towards minimising the risk of loss of revenue arising from DisCos’ engagement of third-party collection service providers.
He concluded by saying that the decision will also help to institutionalise digital payments across all channels, including USSD codes, Point-of-Sale terminals, vending kiosks, mobile wallets, and Internet banking platforms.
“These Guidelines seek to provide clear guidance to DisCos on modalities for the registration of third-party collection agents, including applicable service charges, promote transparency and accountability in revenue collections from electricity sales by third-party collection service partners engaged by Discos, and standardise the use and engagement of third-party collection service partners.
It will also enhance revenue collection in the NESI, ensure the efficiency of revenue collection contracts, and minimise the risk of loss of revenue arising from DisCos’ engagement of third-party collection service providers.
The following shall apply to all CSPs and Discos- No CSP shall be engaged by a Disco without the applicable CBN licence/permit, all third-party collection service agreements/contracts entered into with any Disco under the regulatory oversight of the commission are subject to the commission’s approval and registration before the commencement of the transaction.
All Discos shall adopt more efficient and cost-effective channels for collection, and collection service contracts shall be refunded. All collection service contracts/agreements shall detail clear performance indicators for the collection provider and shall be regularly evaluated by the Disco.
All collection service contracts/agreements shall specify the transaction account details before the approval of the commission, provided that subsequent additions to the listed accounts shall be filed with the commission. Any collection from MD customers shall attract no commission payment to the third-party collection agent,” it read.
