Estimated bills: NERC to deduct N10.5bn from Discos revenue

The Nigerian Electricity Regulatory Commission, on Friday, declared that it would deduct N10,505,286,072 from the annual allowed revenues of the 11 power distribution companies during the next tariff review as part of sanctions over their non-compliance with the capping of estimated bills for unmetered customers.

NERC disclosed this in a notice obtained in Abuja, stressing that the billing of unmetered customers in their various franchise areas for 2023 revealed non-compliance with the monthly energy caps issued by the commission.

It said, “The public may recall that in 2020, the commission issued the order on Capping of Estimated Bills (Order No: NERC/197/2020) and subsequently issued monthly energy caps which aimed to align the estimated bills for unmetered customers with the measured consumption of metered customers on the same supply feeder.

“A review of the electricity distribution companies’ billing of unmetered customers for 2023 has revealed non-compliance with the monthly energy caps issued by the commission.”

In response to this and in a bid to safeguard unmetered customers from arbitrary billing by Discos, the commission stated that pursuant to Section 34(1)(d) of the Electricity Act 2023, it had issued the order on Non-Compliance with Capping of Estimated Bills (Order No: NERC/2024/004-01 4).

It said the order stipulates the following: “Credit adjustment to customers: Discos are to issue credit adjustments to all over-billed unmetered customers for the period January to September 2023 by the March 2024 billing cycle.

“Public notice: Discos have been directed to publish the list of credit adjustment beneficiaries in two national dailies and on their website not later than March 31, 2024.

“Regulatory sanctions: The commission shall deduct a sum of N10,505,286,072 from the annual allowed revenues of the 11 Discos during the next tariff review, to deter future non-compliance with the energy caps approved by the commission.”

Electricity consumers nationwide have continued to lodge complaints against excessive estimated bills by power distribution companies in Nigeria.

For instance, it was reported on December 31, 2023, that power consumers lodged a total of 333,947 complaints bordering on metering, billing, and service interruption to their various distribution companies within three months.

According to the report, this was disclosed in the 2023 third-quarter report of NERC, stating that the complaints were lodged in  July, August, and September 2023.

The report stated that the customer complaints in the third quarter were higher than what was recorded in the preceding quarter by 8,049 cases.

It quoted the NERC report as saying that “the total number of complaints received across all Discos (distribution companies) in 2023/Q3 was 333,947; Ibadan Disco received the highest number of complaints (59,901), representing 17.93 per cent of the total complaints received. Abuja Disco received the least number of complaints (1,919), representing 0.57 per cent of the total complaints received”

Meanwhile, the commission, on Friday, reaffirmed its commitment to regulatory compliance and consumer protection within the Nigerian Electricity Supply Industry.

The power sector regulator can impose various sanctions on power distribution companies for violating regulations or failing to meet performance standards.

These sanctions aim to deter non-compliance and improve service delivery and there are various types of sanctions imposed on defaulting power firms in Nigeria.

The regulator imposes financial penalties on power firms as fines varying in amount based on the severity of the offence. Abuja Disco, for instance, was recently ordered to refund overbilled customers and fined for violating billing regulations.

Benin and Port Harcourt Discos were also fined by the regulator for failing to comply with customer complaint rulings.

On Performance Improvement Plans, the commission undertakes some measures to address specific issues, such as metering, network investment, or service quality.

It also enforces licence suspension/revocation, where in extreme cases, NERC can suspend or revoke Disco’s license, though this is rare.

It should be noted that sanctions are just one aspect of NERC’s regulatory efforts. They also issue regulations, conduct investigations, and engage in stakeholder consultations.

However, the effectiveness of sanctions is debatable, with some arguing that these sanctions have not significantly improved service delivery.

Many power users under the estimated electricity bill category, have repeatedly complained of being over-billed by Discos, as they often accused NERC of not enforcing adequate sanctions on the power distributors.

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