NERC suspends electricity tariff hike


Regulator, DisCos battle over estimated bill capping

Barely 24 hours after putting an end to estimated billings by power distribution companies (DisCos), the Nigerian Electricity Regulatory Commission (NERC) has suspended the move to increase electricity tariff nationwide for now.

The decision was taken at the end of a public hearing organised by Abuja Electricity Distribution Company (AEDC) on the proposed increase in tariff yesterday.

NERC Chairman, Prof. James Momoh, said the decision to suspend the tariff stays until DisCos, the consumers and government reach a compromise.

Momoh said NERC would continue with consultations until a common ground is reached amongst the parties involved.

Earlier on at the meeting, Managing Director of AEDC, Engr. Ernest Mupwaya, hinged the planned increase on inflation rate, CBN official exchange rate and the price of natural gas and its transportation cost by generating companies.

According to him, “To provide a 24/7 service is not entirely in AEDC’s domain because we are just a distribution company.

“But if we want to put the entire supply chain, we need like N43 billion investment to be able to migrate to the level that our customers will enjoy stable power supply.”

He, however, disclosed that Nigerians would be paying 35 per cent in the New Electricity Tariff Review, which will be effective on April 1, 2020.

The proposed tariff review, Mupwaya said, would guarantee sufficient power supply, metering, massive investments in the network and improve service to the customers.

But some of the discussants at the hearing and customers berated DisCos for insisting on tariff increase without adding value.

One of the customers, Dimeji Macaulay, regretted that artisans, who need electricity most for production, did not get as those who can afford to buy diesel for their generators at highbrow areas like Asokoro and Maitama still enjoy almost uninterrupted power supply.

He also pointed out that a larger percentage of Nigerians, who do not have televisions and refrigerators, were still given estimated cut throat bills and wondered why this should be so.

Meanwhile, the axe is still dangling on power distribution companies (DisCos) over estimated bill capping introduced on Monday by NERC.

The DisCos have, at public hearings on Multi-Year Tariff Order (MYTO) review organised by NERC across the 11 catchment areas of the distribution network nationwide, picked holes in the order with which NERC fixed price ceiling for unmetered customers.

NERC’s Commissioner for Finance and Management Services, Mr. Nathan Rogers Shatti, declared in Lagos at the public hearing for Ikeja Electric customers that the DisCos risked dire punishment for failure to adhere to the rule.

Managing Director, Ikeja Electric, Anthony Youdeowei had, during the hearing, punctured the capping system for its silence on service delivery hour.

Declaring estimated billing as an aberration, which is temporary, Youdeowei stated that the capping system introduced to address this was also faulty.

“The NERC has come up with a cap with specific amount. But it does not address the number of hours of supply for which such amount should be paid.

“We buy this power and the institution that sells this power to me does not even understand this grammar that I speak if I don’t pay the money. If the regulator says that collect so and so as bill, it should also tell us for so and so hours. But as it stand, the cap is not fair,” he declared.

Reacting to this, Shatti stated that what NERC issued was an order, which must be obeyed by all DisCos.

“It is an order and all DisCos know the dire consequences of flouting the order,” he declared, adding, “what we have explained to them all is that this capping was based on variables that are due for change in three months and that is why we have slated the capping for review in every three months.”

The consumers, however, expressed the fear that the estimated bill capping may lead to a cut in supply to them by the DisCos.

Chairman, Federal Competition and Consumer Protection Commission (FCCPC), Babatunde Irukera, noted that the DisCos should provide adequate metering for the consumers as the best way to end the bickering.

“What you do is that you are now trying to disagree with an order made to address a total aberration and exploitation of the customers through estimated billing,” he told Youdewei at the public hearing.

The NERC had earlier directed in an Order signed by NERC’s Chairman, Prof. James Momoh and Commissioner, Legal, Licensing and Compliance, Mr. Dafe Akpeneye that it had placed limits on estimated bills that could be issued by electricity distribution companies to unmetered customers.

“The customer shall remain connected to supply without further payment to the DisCos until a meter is installed on the premises under the framework of MAP Regulations or any other financing arrangement approved by the commission. Energy consumed for the purpose of estimated billing is capped during the transitional period till the customers are metered.

“However, the actual amount payable shall vary in the event of any approved tariff reviews affecting their customer class,” it stated.

NERC directed further that “based on the above, the estimated billing methodology is hereby repealed and shall cease to have effect as a basis for computing the consumption of unmetered customers in NESI.”

The commission also said that all DisCos should ensure that all customers on tariff class A1 in their franchise areas were properly identified and metered by April 30.

“All other customers on higher tariff classes must be metered by DisCos not later than April 30. Customers will not be liable to pay any estimated bill issued if the DisCo failed to supply meters,” it stated.

The regulatory body said that “DisCos shall ensure that all customers on tariff class A1 in their franchise areas are properly identified and metered by April 30.

“All unmetered RS and C1 customers shall not be invoiced for the consumption of energy beyond the cap stipulated in schedule 1 of this order.

“All R1 customers, who by definition consume not more than 50 kilowatt hour (kWhr) of energy per month, shall continue to be billed at N4 kWhr and a maximum of N200 per month unless otherwise amended by an order of the commission,” it said.

It stated that if the DisCos failed to comply, affected customers would no longer be liable to pay any estimated bill issued by DisCos.

The commission warned that any customer that rejects the installation of a meter on their premises by a DisCo shall not be entitled to supply and must be disconnected by the DisCo.