Power: NERC Issues Fresh Guidelines on Third-party Revenue Collection
The Nigerian Electricity Regulatory Commission has released new guidelines mandating a digitised, transparent, and accountable framework for electricity revenue collection.
The new regulatory directive, titled “Guidelines on Registration and Engagement of Third-Party Collection Service Providers”, was released on Wednesday and signed by the NERC Chairman, Sanusi Garba.
The new regulatory directive, which takes effect immediately, is anchored on the powers conferred upon the Commission by Section 226 of the Electricity Act 2023.
The guidelines are targeted primarily at Electricity Distribution Companies operating in states that have yet to establish their electricity markets.
NERC stated that the move aligns with the Federal Government’s push for a cashless economy and aims to tighten controls over electricity revenue inflows in the Nigerian Electricity Supply Industry.
Under the new framework, Discos are prohibited from engaging unlicensed agents for bill collections.
Only third-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 eligible to operate.
The document read, “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 commission has also introduced capped commission rates across all payment channels. For example, USSD transactions below N5,000 will attract a maximum commission of N20. Rural agents may charge up to 3.25 per cent per transaction, subject to a cap of N2,000.
In a bid to protect industrial and commercial consumers, Maximum Demand customers will continue to enjoy zero commission charges on their bill payments. The policy is built on NERC’s earlier Order No. NERC/183/2019, which eliminated cash payments for large-scale electricity users.
The latest guidelines now seek to institutionalise digital payments across all channels, including USSD codes, Point-of-Sale terminals, vending kiosks, mobile wallets, and Internet banking platforms.
With the new directive, all Discos are now required to submit existing CSP contracts for regulatory compliance within 90 days, while failure to comply could attract sanctions.
It explained, “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.
“The above-approved commission/rates shall remain in force until amended by the commission. All existing and operating contracts must be regularised within 90 days from the effective date of these Guidelines.”
