A Review of the Nigerian Energy Industry

Power firms may sue NERC over metering fines

08 October 2015, Abuja – Power distribution companies have threatened to take the Nigerian Electricity Regulatory Commission to court over its planned sanction of errant Discos that failed to adhere to its directive on metering of electricity consumers.

Dr. Sam Amadi.
Dr. Sam Amadi

Most of the companies awaiting the NERC’s fine any time from now, after Ikeja Electric was recently sanctioned, insisted that they would seek justice through the law court.

NERC had, on Sunday, slammed a fine of N131.4m on Ikeja Electric for “defying the regulator’s metering order.”

NERC said the firm was sanctioned for its “flagrant breaches” of the Credited Advance Payment on Metering Initiative Order.

Indications, however, emerged on Wednesday that almost all the Discos in the country were guilty of the same charge, and could be sanctioned by the regulator.

A power sector source told our correspondent, “The same measure would be used on every Disco. They have been pampered for too long. But I can tell you that the level of sanction will be tied to their level of compliance in the area of customer metering.”

Spokespersons for two of the Discos who spoke to our correspondent in confidence, said they would not join words with NERC in the media in respect of the sanctions but would seek redress in the law court.

The NERC Chairman, Dr. Sam Amadi, responding to the threat by the Discos, told our correspondent on the telephone on Wednesday that the commission would appear in court if it received court statements on the matter.

He said NERC had respect for rule of law, and would not do anything to undermine court processes.

The NERC boss said for other Discos, the commission was reviewing their levels of compliance in terms of customer metering, and would take action immediately the assessment was concluded.

Meanwhile, the Chief Executive Officer, Ikeja Electric, Mr. Abiodun Ajifowobaje, said the company was currently reviewing the fine by NERC and would take appropriate action(s) in due course.

He, however, declined to comment further on the issue.

But our correspondent learnt from a source close to the company that it might resort to going to court to challenge NERC’s sanction.

Our correspondent, however, gathered that some Discos were making last minute moves to see how best the situation could be managed.

NERC had said its recent fine imposed on Ikeja Electric was contained in Order NERC/141 and was issued on September 29, 2015 as a follow up to an earlier notice of commencement of enforcement action on the Disco alongside 10 others.

The electricity distribution company was further ordered to “pay an administrative fine of N500 per minute for every hour of the day that it continues to default from October 12, 2015 until it complies.”

NERC said IKEDC’s action violated Section 63(1) of the Electric Power Sector Reform Act, 2005; Section 2(1) of the terms and conditions of its licence; as well as the commission’s order on the CAPMI.

The CAPMI is an initiative of the commission to assist the power distribution companies to close the wide metering gap in the power sector. It was introduced following a nationwide study conducted by NERC, which revealed that more than 50 per cent of electricity consumers were not metered but instead were on estimated billing.

The initiative permits willing electricity consumer to pay for their meters, which should be supplied within 45 days after payment is made. The customer is thereafter refunded the money over a period of time through a rebate or reduction in the fixed charge component of the electricity bill.

NERC said it initiated the scheme following complaints of lack of funds to meter customers by the Discos, adding that the wide metering gap accounted for the high incidence of customers’ complaints, commercial losses and high operating cost in the Nigerian electricity supply industry.

  • Punch
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