Nigerian Electricity Regulatory Commission (NERC) has imposed a fine of N10.5 billion to be paid by all the eleven Electricity Distribution Companies (DisCos) for not following the legal capping of estimated billing for unmetered customers across the country.
This was according to a statement issued by NERC which was signed by its management. It indicated that the DisCos have disobeyed the legal credit cap for unmetered customers, opting instead to levy arbitrary charges on them. This action amounted to the violation of section 34(1)(d) of the Electricity Act of 2023.
The statement read in parts: ‘In response to this and the bid to safeguard customers from arbitrary billing by DisCos, the Commission, pursuant to Section 34 (1)(d) of the Electricity Act 2023 (EA 2023) has issued the Order on Non-compliance with the capping of estimated bills.”
NERC stated that DisCos are to issue credit adjustments to all over-billed for the period of January to September 2023 by the March 2024 billing cycle.
Also, DisCos have been directed to publish the list of credit adjustment beneficiaries in two national dailies and on their website no later than 31st of March 2024.
The statement further concluded that, “The commission shall deduct a sum of N10, 505, 286,072 from the annual allowed revenues of the eleven (11) DisCos during the next tariff review, to determine future non-compliance with the energy caps approved by the Commission. The Commissioner publicly reaffirms its commitment to regulatory compliance and consumer protection with the Nigerian Electricity Supply Industry.”
NERC proposes to issue an order stipulating the maximum amount that any unmetered customer will pay to the distribution company (DisCo) that provides him or her electricity services. This amount will continue to apply until the customer is metered by the distribution company.
The capping system on estimated billing for the energy companies was ordered in February 2020 by the NERC. The caps are determined based on the consumption of neighbouring customers and DisCos are penalized for flouting them. The introduction of energy caps by the NERC aims to provide a fairer billing system for customers who have not yet been metered.
The Electricity Distribution Companies have not been following the rules set by NERC. As a result, they have been charging energy users without any regulation or control, and consequently, NERC has imposed a fine to hold them accountable for their non-compliance.
The NERC’s methodology for Estimated Billing Regulations 2012 was introduced in 2012 to deter Distribution Companies (DisCos) from issuing to electricity customers arbitrary electricity bills which did not reflect their actual power consumption. The Estimated Billing Methodology Regulation classified consumers who can be issued estimated bills into three (3) basic categories:
The categories of customers are customers with faulty meters who are issued meters but which are no longer functional, customers whose meters cannot be read. This category belongs to those customers whose meters cannot be read by the officials of the applicable DisCo due to inaccessibility arising from locked doors, customers who are not on the premises at the time when the officials of the DisCo come to read the meter, the presence of dogs on the premises of the customers, among others.
Finally, existing customers without meters belong to customers who have not been issued meters by the DisCos and who are directly connected to the DisCos’ distribution network.
However, the Estimated Billing Methodology Regulation achieved little success due to inadequate level of metering and distribution transformers. Over 65% of complaints lodged at the customer centres of DisCos together with the subsequent appeals to NERC are as a result of non-provision of meters and unrealistic billing of unmetered customers. To facilitate the metering of electricity consumers, the NERC introduced the Meter Asset Provider (MAP) Regulations in 2018 with the ambitious aim of metering all customers within 3 years.
