NERC’s Yellow Card to DISCOS

The Nigerian Electricity Regulatory Commission threatens electricity distribution companies with fines over continued resort to estimated billing of consumers

By Anayo Ezugwu  |  Apr. 28, 2014 @ 01:00 GMT

THE era of estimated electricity bills will soon be over. The Nigerian Electricity Regulatory Commission, NERC, is set to battle the distribution companies in the country over estimated electricity bills. The NERC said it has approved the enforcement of a regulation that spell out fines against any electricity distribution company, Disco, that imposes outrageous bills on consumers in violation of the agency’s guidelines on estimated billings.

Sam Amadi, chairman, NERC, who confirmed the introduction of a series of measures laid down by the agency to stem the tide of growing public discontent against what he called “crazy bills”, said that some of the Discos may have actually resorted to  indiscriminate allocation of outrageous estimated bills to their consumers, instead of reading the meters to determine their actual monthly consumption.

According to Amadi, 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.
“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,” he said.

But Realnews 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 some 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 since the private investors took over in November 2013.

The exorbitant bills imposed on 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 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, said that the agency would initiate sanctions against the erring Discos, starting from this week. “On Monday, April 14, we will be approving the enforcement regulation that stipulates financial fines. On Wednesday, April 16, 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, adding that the agency would be sending monitors around the 11 distribution companies across the country, starting from this week.

Issa Aremu, vice-president, Nigerian Labour Congress, NLC, 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. He 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 Summi, 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.