Dead On Arrival

Fri, May 9, 2014

By publisher

6 MIN READ

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Although Sam Amadi, chairman, Nigerian Electricity Regulatory Commission, has ordered electricity distribution companies not to demand fixed charge from consumers who not enjoy electricity supply for at least 15 days in one month, there is doubt about its  effective implementation of the new policy

|  By Vincent Nzemeke  |  May 19, 2014 @ 01:00 GMT

FOR many Nigerians, constant power supply is a dream that will never ever materialise. No matter how many times the power generating and distribution companies change their names, it will not necessarily translate into better performance.  Their poor performance notwithstanding, one issue that has sparked off controversy between electricity providers and consumers is that of ‘fixed charge.’  For many consumers, it sheer extortion to ask them to pay a certain fixed amount regardless of the poor services they get from electricity providers.

Many Nigerians have always questioned why the Nigerian Electricity Regulatory Commission, NERC, would collaborate with the distributing companies to make them pay for electricity that was never consumed. Thus, over the years, the issue of fixed charge has generated a lot of outcry which, sometimes, have culminated in protests in some parts of the country.

In Edo state, for instance, some residents recently took to the streets to protest against the N750 monthly fixed charge demanded by the Benin electricity distribution company, BEDC, upon payment of electricity bills, especially for those using pre-paid meters. Patrick Eholor, one of the protesters, said they were on the streets to protest continuous ‘‘payment for darkness’’.

Eholor, who urged the people to join in the struggle against exploitation by the BEDC, said they would remain on the streets until the monthly fixed charge is abolished. The fixed charge, he said, “is a projection of Multi-Year Tariff Order, which means that the fee increases every year and as such translates into exploitation, oppression and fraud.

“The fixed charge is programmed to run for a period of four years in the first instance, that is, from 2012 to 2015. This means that customers will pay N500 in 2012, N750 in 2013, N1, 500 in 2014 and N1, 800 in 2015 for single meters only. “It is clear from these facts that the operation of the BEDC is geared towards exploitation, oppression and fraud.”

In her reaction to the protest, Funke Osibodu, managing director of BEDC, explained that the fixed charge was not an extortion but a charge that enables electricity to be constantly distributed to various homes in the region. She said: “The N750 fixed charge is not a Benin Distribution Company issue; everybody is deducting it.”

Protest over fixed charge is not only in Edo state. Even in Abuja, the federal capital territory, there have been torrents of complaints especially by residents in the satellite areas where electricity is not always available. But shedding lights on the ‘fixed charge’ controversy, Osibodu said it was only the national electricity regulatory commission, NERC that could scrap the monthly payment of N750 fixed charge.

As the complaints continued to pile up across various parts of the country, the NERC, has clarified the conditions under which electricity distribution companies ,known as Discos, can collect fixed charge from electricity consumers.

According to it, “The fixed charge covers the capital cost and fixed operations and maintenance cost of the various utilities across the industry. The energy charge is a function of consumption. It is paid by customers only when electricity is consumed and is intended to cover the fuel cost, variable operation and maintenance cost and a portion of the tax cost incurred by market participants”.

But despite this explanation, it appears that consumers are still not satisfied. That, probably, explains the reason for the continuous calls for a reduction or total scrapping of the fixed charge. The reasoning by some consumers is that being made to pay for a product not supplied is a rip-off especially now that the private sector is at the driving seat in the Nigerian electricity supply industry, NESI.

The agitations against the charges are sustained because of the fact that power generation in the country has not improved in a long while. But Chinedu Nebo, minister of power, has stated the reason. According to him, about $300bn is needed to bring power supply to the level required to satisfy the country’s energy need. He said at least a double of the current generation capacity of about $10billion would be needed to improve power supply in the country.

Not many electricity consumers are impressed by Nebo’s excuses. They want to see improved performance in the interim as the continuous poor supply of power has led to   intensified calls for the scrapping of the fixed charges. The unending calls have forced the NERC to review the conditions for the payment of the fixed charge.

Under the new conditions, any consumer who was not supplied electricity for 15 days consecutively or cumulatively in a month will not pay the fixed charge for that month.

Sam Amadi, Chairman of the NERC said: “While the Commission has determined that the fixed charge remains an essential component of the bill, it has however, reviewed the continuous retention of the fixed charge component in the tariff in the light of several complaints by consumers particularly with regards to the continued payment of fixed charge even when energy is not delivered to the consumer.”

Amadi said  the implementation of the new order would   commence immediately once it was served to the distribution companies, but, however, noted that certain conditions must be established for affected consumers to be entitled to such fund to be withheld.

Some of the conditions include valid evidence that interruptions in power supply to affected consumers were not occasioned by larger industry disturbances such as drop in national power generation capacity, vandalism of strategic national power supply assets like transmission lines and such extant general challenges that are peculiar to  the power sector.

But he stressed that instances of willing cut in power supply as a result of transformer and distribution assets breakdown and a subsequent refusal of the distribution networks to fix same would be counted as conditions upon which consumers can base their claims if it contributed to  power supply interruptions for up to 15 days.

As expected, many Nigerians are already reacting to the conditions. It appears that many people are not satisfied as the conditions appear to favour the DISCOs rather than the consumers.

Oludotun Ojelabi, an estate agent in Abuja, said that “consumers will not be able to prove any case when the matter goes to court because the conditions are too ambiguous. “They are not doing us any favour because the conditions are difficult to prove. How will a consumer know the cause of power failure? What matters is that power is not available when we need it and we should not be forced to pay.”