A Review of the Nigerian Energy Industry

NERC moves to sanction electricity distribution companies over exorbitant bills

Dr. Sam Amadi14 April 2014, Lagos – Apparently worried that consumers of electricity in Nigeria are increasingly paying more for darkness, the Nigerian Electricity Regulatory Commission (NERC) will today approve the enforcement of a regulation that stipulates financial fines against any electricity distribution company (Disco) that imposes outrageous bills on consumers in violation of the agency’s guidelines on estimated billings.

The Chairman of NERC, Dr. Sam Amadi, who confirmed a series of measures to stem the tide of growing public, discontent, against what they call “crazy bills”, told THISDAY at the weekend that some of the Discos may have actually resorted to the indiscriminate allocation of outrageous estimated bills to their consumers, instead of reading the meters to determine their actual monthly consumption.

NERC’s guidelines stipulate that the “distribution companies shall endeavour to obtain an actual reading of all meters recording electricity usage at all supply addresses within their areas of operations every month, or at such intervals as approved by the commission.”

The guidelines also stipulate that estimated billings shall apply only to consumers, who do not have meters or whose meters are not functional.

According to the guidelines,“Every DISCO shall endeavour to read the meter, at least, once in three months and the estimated bills issued shall not amount to a figure in excess of the cumulative average of the consumers consumption.”

But THISDAY gathered that except few consumers, who have prepaid meters, majority of others are slammed with outrageous estimated billings monthly by some Discos without recourse to their actual consumptions as indicated on their meters.

It was learnt that Resident 2 (R2) consumers, for example, who consume an average of 180 units monthly at N12.87 per unit when supply is fairly stable, are made to pay estimated bills of between N5,000 and N12,000 monthly, even when the Discos have confirmed that electricity supply has dropped to an all-time low, since the private investors took over in November 2013.

The exorbitant bills imposed on R2 consumers of electricity , it was gathered, are far higher than their actual consumption, which averaged N3,066.6, including a fixed charge of N750 monthly.

The increasingly high charges being imposed on consumers by some Discos, contrary to NERC’s guidelines, have fuelled pockets of protests across the country and effectively attracted the attention of the electricity regulator.

Amadi, who confirmed the abuse of the estimated tariff mechanism by some of the Discos, told THISDAY that the agency would initiate sanctions against the erring Discos, starting from this week.

“On Monday (today), we will be approving the enforcement regulation that stipulates financial fines. On Wednesday at the meeting with the chief executive officers (CEOs), we will focus on estimated billing and each Disco will present what it does for peer review,” he said.

Amadi also said his agency would be sending monitors around the 11 distribution companies across the country, starting from this week.

The Vice-President of the Nigerian Labour Congress (NLC), Mr. Issa Aremu, had described the increase in tariffs by the Discos without corresponding increase in electricity supply as criminal, warning that tariffs should be commensurate with service delivery.

Aremu told the private investors that “it is stealing if you increase tariffs without improved service.”

However, the discos have listed some challenges around power generation, infrastructure, revenue collection, appropriate pricing and gas supply, as some of the factors militating against improved service delivery.

Speaking at the just-concluded seventh Lagos Economic Summit, tagged: ‘Ehingbeti 2014’ in Lagos, some of the Chief Executive Officers of the discos present, argued that power has to be generated before it is distributed by the discos.

They called for cost-reflective tariffs and improved gas supply to boost electricity generation and also ensure that the investors recoup their investment overtime and make profit.


– Ejiofor Alike, This Day
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