N2m transformer scandal: How KAEDCO lost asset on tariff

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The failure to produce a 500kva electricity transformer to the Southern Kaduna community which contributed N2 million to the company six months ago, Kaduna Electricity Distribution Company (KAEDCO) will not get a return on the asset in its tariff.

The verdict was conveyed to the Distribution Company by the Nigerian Electricity Regulatory Commission (NERC) after it intervened.

The intervention of the Nigerian Electricity Regulatory Commission (NERC) has resolved brewing crises in the Kaduna Electricity Distribution Company (KAEDCO) coverage area as it was sequel to protests by youths of two communities in the North and South of Kaduna.

Badarawa Community had contributed N2 miillion to purchase a transformer and was awaiting connection to Kaduna Disco network. The Minister of Works, Power and Housing, Babatunde Fashola, recently ordered an investigation by the Nigerian Electricity Regulatory Commission into the alleged exchange of money following a protest letter by a youth of the community to him.

 Dr. Anthony Akah, the Ag. Chairman of the Commission, subsequently dispatched an investigation team to Kaduna for on the spot assessment and resolution of the complaint. The team discovered that the community actually donated the Transformer to KAEDCO to facilitate the restoration of power to their area which had been in darkness for the past six months.

The agreement is however, in clear violation of the Commission’s regulation which makes installation of facilities the Disco’s responsibility.  

Meanwhile, the purchased transformer is expected to be connected to provide electricity to the community and reflected in KAEDCO’s Regulated Asset Base.  This implies that KAEDCO will not get a return on the asset in their tariff.

Another community,  Janruwa,  at a meeting organized by the Commission in Kaduna, disclosed that the youths of the locality protested what they described as an extreme darkness as they have been out of electricity for over a year.

KAEDCO in their defense, informed NERC investigators that the Janruwa community was very large, requiring about 500 KVA transformers for a start, which was not available. 300 KVA transformer  was taken to the community, but it was taken away when it realized the population of the community, with the intention of replacing it with a 500KVA transformer.

The removal of the 300KVA transformer trigged the protests by the youths.

However, the Commission at the meeting had extracted commitment from KAEDCO to provide Janruwa with a 500 KVA transformer before the end of June, 2016. This is in addition to returning of and installation of a 300KVA transformer earlier removed which will give the Community a total of 800KVA capacity.
Source-Nigeriatoday



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