The Nation Newspaper

Tag: fixed charge

  • DisCos battle to recover unpaid fixed charge

    Electricity Distribution Companies (DisCos) are battling to recover huge unpaid fixed charge, increasing customers’ financial burden.

    The Nation learnt that the Discos are insisting on payments of the fixed charges before customers recharge their meters. Customers using either analogue or pre-paid meters before did not pay fixed charges.

    Customers were said to have defaulted in fixed charge payment fore it was abolished and tariff increaesed by 45 per cent last February 1.

    Managements of the DisCos have warned their officials not to recharge the meters of customers who owe fixed charges until such debts are fully paid.

    Most of the business units in Ikeja Electric (IK) visited by The Nation, showed that customers who owe arrears of fixed charges were barred from recharging their meters.

    According to officials of Ikeja Electric at Ponle Business Unit in Egbeda, Lagos, the decision was made by the management to make customers pay fixed charges they owe before the government cancelled it in February this year.

    A manager in the Unit, who spoke under condition of anonymity, said customers were owing DisCos arrears of fixed charges, stressing that power firms are not leaving any stone unturned to recover fixed charges owed them by customers.

    He said: “From the available information at our disposal, it is clear that a lot of customers were indebted to the power distribution companies. Of note is debt arising from non-payment of fixed charges.  There are two approaches of recovering fixed charges owed by customers. First, DisCos have factored the fixed charges into monthly bills they are issuing to customers every month. Secondly, firms are compelling customers to clear arrears of fixed charges they owe before they are allowed to recharge their meters.”

    He said power firms have ruled out the issue of concessions for customers that owe fixed charges; stressing customers are under obligation to pay their debts.

    “Many customers have approached us for concessions on the issue of payment of fixed charges they owe before it was abolished by the government.  However, we told them point blank that we cannot give them concessions. Energy business is different from trading in pepper and onion, in which you can go to the market and pile up your debts. The only way for the DisCos to grow is to collect all their debts,” he added.

  • Eko Disco lauds NERC over new electricity tariff

    The Eko Electricity Distribution Company (EKDC) on Thursday commended the Nigerian Electricity Regulatory Commission (NERC) on the new tariff regime.

    Mr Godwin Idemudia, the Corporate Communications Manager in EKDC, gave the commendation in an interview with the News Agency of Nigeria (NAN) in Lagos.

    He was reacting to the removal of fixed charges under the new tariff regime introduced recently by the NERC.

    According to him, removal of fixed charges by government is a welcome development which will benefit the customers a great deal.

    Idemudia said that his company would now redouble its efforts on its metering project.

    He said that the company had the least charges among the operators going by what NERC had just released.

    “What it means now is that we are going to pursue vigorously our metering rollout plans to meet the yearnings of customers.

    “But for those who cannot wait for the rollout plan to get to them, they can key into our Credited Advanced Payment Metering Implementation (CAPMI) programme to avoid estimated bills which do not favour the company nor the customers.”

    Idemudia said that his company’s recent arrangement with Egbin for supply of 100 mega watts was still in place.

    “Customers within Lekki, Ajah, Ibeju and environs will benefit greatly from this special plan.

    “This is energy that will come directly to us without passing through the national grid.

    “In this special arrangement, the customers will pay slightly more than regular customers.

    “The good news is that it would be stable almost at all times,” Idemudia explained.

    He said that the company had put in place special fault clearing teams to respond to faults during the Christmas and New Year period for faults to be attended to within a very short time of distress calls.

    “Our equipment have been serviced to take any amount of energy that may be wheeled to us by the generation companies via transmission.

    “While we wish our our customers the very best this season, we appeal to them to pay their bills regularly and also make use of our customer care helplines whenever they need our services.

    NAN recalls that the NERC, on Dec 21, outlined various rates of increase in energy charges for consumers across the country.

    It announced the removal of fixed charges for all classes of electricity consumers so that power users would only pay for what they consumed.

    Fixed charge is that component of the tariff that commits electricity consumers to paying an approved amount of money not minding whether electricity is consumed during the billing period.

    Under the new arrangement, residential customer classification (R2) in Abuja Electricity Distribution Company will no longer pay N702 fixed charge every month.

    Their energy charge will, however, increase by N9.60.

    Also, residential customers (R2 customers) in Eko and Ikeja Electricity Distribution zones will no longer pay the N750 fixed charge.

    They will, however, be paying additional N10 and N8, respectively, in their energy charges.

  • NERC denies abolishing meter fixed charge

    NERC denies abolishing meter fixed charge

    • Eyes 6,000Mw this year

    The  Nigeria Electricity Regulatory Commission (NERC), has denied abolishing fixed charge on electricity consumers’ meters in the country.

    Its Chairman, Dr. Sam Amadi said the fixed charge cannot be removed with executive fiat.

    He said: “Fixed charge has not been removed. A regulator does not remove something by executive fiat. It has to go through a process.’’

    He said the Nigerian Electricity Supply Industry  (NESI)

    is working out a  template for generating over 6,000megawatts (Mw) of electricity by the end of the year.

    Amadi, who spoke with reporters yesterday during a two-day workshop by NERC to present a template for effective project management to the electricity industry performance management officers in Abuja,  said the meeting would provide the opportunity to present the performance management officials a template designed by NERC and a consultant.

    He said the template being given to the performance officers would enable them to learn how to deliver on projects in good time.

    He said: “This meeting is for us to meet with our stakeholders to show them the template we have designed with consultants to enable them deliver on time and effectively.

    “We want to increase our capacity. There is a possibility of ending this year with over 6000Mw or close to that”

    Amadi, however, identified corruption, poor budgeting as the problems bedeviling the electricity sector.

    According to him, prior to 2010, the sector suffered the problem of modelling, but from 2010 to date, it has faced management problems.

    He said the problem was mostly caused by corruption, adding that inefficient budget cycle have made it difficult for effective delivery of projects within a target time frame in the sector.

  • NERC to Senate: we can’t abolish fixed charge

    NERC to Senate: we can’t abolish fixed charge

    •Fixed charged to be proportional to consumption

    The Nigeria Electricity Regulatory Commission (NERC) yesterday told the Senate that it cannot abolish the fixed charge.

    NERC Chairman Dr. Sam Amadi  said  the  National Assembly had passed the Electric Power Sector Reform  (EPSR) Act, which mandated the commission to produce a tariff methodology for the electricity market.

    He argued that removing the fixed charge would contradict the law the National Assembly made on tariff methodology.

    Amadi spoke with reporters in Abuja, noting that tariff making could not be an executive fiat.

    He said: “The National Assembly made the ESPR Act. And the Act said the commission should produce a methodology. Tariff making is a process-based activity. It is not an executive fiat. The reason why the law created the regulator is to give confidence to the market;  their decisions are procedural and the decisions are deliberately considered.

    “Our decisions are in line with due process. Otherwise, the law should have left the sector under the control of  Ministry of Power the normal way it was with the ministry. So it will issue an executive ruling. So NERC cannot wake up in the morning and say we have abolished this. That will undermine the law that the National Assembly made.

    “Don’t forget that we were created by a clearly legislative-defined mandate. And one of the mandates is to create regulations that are done in a particular way. So we cannot come and say we have abolished fixed charge.

    “We will always go through a process and the process is that before that Senate’s decision, we had commenced a process to remove the fixed charge in a way you understand it, then  allowing recoveries to be made as you consume.

    “Essentially, we are in line with the decision of the Senate. The Senate’s concern is the fact that people are paying for what they do not consume. And we are in line with the Senate; we are working with the Discos to remove that aspect of the pricing methodology. That is to make sure that people pay for what they consume and pay fair and reasonable charges determined through a process allowed by the law.

    “We don’t think that abolishing a fee that is part of recovery is dangerous for the  solvent of the Discos. But through a tariff review, the Discos can remove the fixed charge and find a way to recover those costs through the normal energy charge.”

    Continuing, he said: “Communities that are placed on bulk billing should reject it and insist on individual metering. The commission is in the process of completing a public consultation on a proposal to capture the amount an unmetered customer can pay until he or she is metered. The proposal will also commit distribution companies to strict deadlines for metering of all their customers. In the interim, the commission has abolished connection of new customers without meters.”

    Amadi said the commission monitors complaints reported to the Discos monthly,   to ensure that Discos carry out their responsibilities.

    He noted that NERC, as a result of the monitoring, recently penalised the Abuja Electricity Distribution Company for over billing customers and ordered it to refund the customers.

    The chairman added that the company refunded about 32,000 customers, ranging between N5,000 and N15,000 per customer, adding up to over N50 million.