The Federal Government generated N5.994 billion from licence fees and regulatory charges in 2018 but spent N4.938bn on salaries, post-employment benefits and other allowances for the seven commissioners and 165 support staff at the Nigerian Electricity Regulatory Commission (NERC).
Documents obtained by Daily Trust revealed that the spending on the payments was over N1 billion higher than the N3.930bn paid out to six commissioners and 166 staff in 2017. This paper reported last week that the salaries alone gulped N503m in 2018. However, it was learnt from insiders that the seven commissioners got 40 per cent of the payment.
The Chairman/Chief Executive of NERC, Prof. James Adeche Momoh, was appointed in April 2018 bringing to seven the total number of commissioners, an audit report noted.
How NERC got N5.9bn funding
Analysis of the N5.9bn revenue generation reflected in the audit report shows that Nigerian electricity consumers are solely responsible for paying the huge benefits and salaries to the commission by way of 1.5 per cent fee included in the cost per 1 kilowatt hour (kwh) consumed by an electricity user across the 11 power Distribution Companies (DisCos). It gets another 1.5% on licences from generation firms and licensees.
According to the Deloitte report, NERC received N5.535bn for 2018 from consumers in the electricity market and N5.337bn in 2017. The Federal Government through budgetary subventions released N355m in 2018 and N900m in 2017. NERC also got N76.6m as grant from MacArthur Foundation in 2018 after it had received N45.80m grant from the same foundation in 2017 for capacity building.
The audit report, which was prepared by Deloitte & Touche Chartered Accountants in Abuja, was approved by the commissioners on May 23, 2019. It was signed by the Vice Chairman, Sanusi Garba; the Commissioner for Legal, Licencing and Compliance, Dafe Akpeneye, and the Commissioner, Finance and Management Service, Nathan Rogers Shatti on behalf of the other four.
Despite the burden on electricity consumers to pay these commissioners, many have not gotten value in terms of improved electricity supply. Power sector records show that poor regulation, lack of holding investors to boost their networks, non-implementation of six reviews of the Multi Year Tariff Order (MYTO) 2015 and past unrealistic projections for power generation and distribution by NERC have caused a shortfall of over N1.3 trillion in 2019 making the private-led sector to drag.
Concerns over N3bn ‘other benefits’ at NERC
According to the salary scale of the commission, the seven commissioners including the chairman, Prof. James Momoh, receive over N85m annually while the six others receive remunerations that are over N40m per annum.
A breakdown of the N4.9bn payments in 2018 revealed that post-employment benefit expense (pension) took N621.6m while post-employment ‘benefit’ was N716.7m.
The heaviest of these was the unexplained ‘other benefits and allowances’ of the commissioners and staff which consumed N3.096 billion in the year. It was separate from the salaries and pension contributions.
Sources privy to this at the commission confirmed a series of investigation by Daily Trust in 2015 showing the former commissioners allocated salaries and allowances to themselves without recourse to the National Salaries Income and Wages Commission (NSIWC) as directed by the Electric Power Sector Reform Act (EPSRA) 2005.
It was learnt that the daily travel allowances of the chairman and commissioners are reported to be $1,300 and $1,200 respectively and all travel on business class tickets, without seeking approval on foreign trips from the Presidency through the Secretary to the Government of the Federation (SGF).
An official referred to a public hearing on the N2.7bn NERC Severance payment by the House Committee on Power in 2016 which was an action triggered by a Daily Trust investigation in 2015. The Chairman of NSIWC, Mr Richard Onwuka Egbule, in a presentation said “the salaries and remunerations of the commissioners are unrealistic and illegal and should be stopped.”
It was alleged that new aides of the commissioners were recruited in total disregard of the extant policy that they are not entitled to have federal government paid aides. However, about N198 million has been expended on them.
Any vacuum at NERC by 2020?
For the chairman, Prof. Momoh, this paper gathered he would be 70 years old by 2020 and that would have been just slightly two years of serving as chairman. He will earn about N300m as severance package and other benefits which the former commissioners had set precedence.
The EPSRA 2005 stipulates he retires at 70 years as chairman. More so, when the tenure of commissioners elapses, they are not permitted to work in the power sector for two years. The former commissioners led by Dr. Sam Amadi set severance package for themselves on the basis of this.
There are also fears that the power sector could see another regulatory vacuum when Prof. Momoh retires by 2020 as the NERC commissioners’ tenure ought to elapse by 2021. They were appointed early 2016, 13 months after the former commissioners left.
The vice chairman, Engr Sanusi Garba, acted for 14 months until Momoh assumed office in May 2018. So leaving by 2020, means over 12 months of space again.
To get his position on these financial concerns, poor regulatory actions and his looming retirement, NERC Chairman, Prof. Momoh, on telephone said, “There is no misappropriation in the commission as I know. There is no such thing. I have a five-year appointment and I was delayed for one year. I have a legal appointment of which I lost a year and all that time, I had no income from it.”
Speaking on the recourse to NSIWC for setting NERC salaries, he said: “No that is not true. We have our own local ways and independence. We have gone through all that in meetings at the National Assembly.
“I think everybody is just looking for things they can use to keep us away from our work. We have a lot of work to do than to be spending time on finance,” he noted.
The chairman said he was focused on the real job at NERC. “People like us are putting almost 16 hours on the job and so it is with other members of the staff. The issue is that people who are not happy with us and can’t find fault, they are trying to create one.”
“We are doing our work and people are wasting their time. They are not worried about how things were damaged and we are trying to fix them. There are a lot of challenges of things that were not done properly before and we doing that,” Momoh said.