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Tag: fixed charges

  • NERC approves new electricity tariff, abolishes fixed charges

    NERC approves new electricity tariff, abolishes fixed charges

    The new electricity tariff regime approved by the Nigerian Electricity Regulatory Commission (NERC) has removed fixed charges for all classes of electricity consumers.

    This is contained in a statement on the company’s website, signed by its Head, Public Affairs Department, Dr Usman Abba Arabi.

    It said from the next billing period, distribution companies would no longer charge their customers monthly fixed charges.

    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 tariff regime, electricity consumers will now only pay for what they consume from month to month.

    According to the Chairman of NERC, Dr Sam Amadi: “This is good news for electricity consumers who have long asked for a more just and fair pricing of electricity.

    “The regulatory commission had promised to address all the complaints against fixed charges through a regulatory process that promotes investments in the electricity industry without unfairly burdening electricity consumers.

    “This is in line with NERC’s mandate to be fair in all its regulatory interventions.”

    Although, the new tariff regime comes with an increase in energy charges, all electricity consumers (residential and commercial) will no longer pay fixed charges.

    “Their total bills will depend on the electricity they actually consume and may be reduced when they conserve electricity.”

    The statement said that consumers would no longer spend money every month to pay for fixed charges even when they did not receive electricity in their homes and business.

    “The objective of the new tariff is to enable prudent consumers to save money on electricity bill as they can now control their consumption and not pay monthly fixed charges.”

    For instance, residential customer classification (R2) in Abuja Electricity Distribution Company will no longer pay N702 fixed charge every month.

    Their energy charge will increase by N9.60kwh.

    Also, residential customers (R2 customers) in Eko and Ikeja electricity distribution areas will no longer pay N750 fixed charges.

    They will be getting N10/kwh and N8kwh increase respectively in their energy charges.

    Similarly, the burden of N800 and N750 fixed charges would be lifted off the shoulders of Kaduna and Benin electricity consumers.

    These consumers will see an increase of N11.05/kwh and N9.26/kwh respectively in their energy charges.

    The new tariff is also good news for commercial consumers.

    For example, commercial customers’ classification C2 in Ibadan and Enugu will no longer pays fixed charges of N17, 010. and N22, 141.

    Their energy charge will increase by N12.08kwh and N13.35kwh respectively.

  • NERC orders restructuring of fixed charges

    NERC orders restructuring of fixed charges

    •Discos asked to discontinue bulk metering

    The Nigerian Electricity Regulatory Commission (NERC) has directed Distribution Companies (Discos) to restructure their fixed charges so that subscribers do not pay for electricity they do not consume.

    The directive is in line with a resolution passed by the Senate for NERC to look into complaints by electricity consumers over indiscriminate billing.

    The Discos have also been directed to discontinue the practice of bulk metering.

    The Senate, in its resolution following a motion by Senators Sam Egwu (Ebonyi North) and David Umaru (Niger East) entitled:  “Unfair trade practices of Electricity Distribution Companies in Nigeria” decried the fleecing of Nigerians by Discos through fixed charges and bulk metering among others.

    It directed NERC to immediately abolish fixed charges on electricity consumption as well as bulk metering of villages and communities.

    In a seven-page response to the Senate’s directive, NERC said it had told the Discos to restructure the fixed charges.

    The chairman/Chief Executive Officer NERC, Sam Amadi, who signed the letter, said even though the fixed charges were not illegal, the commission had been able to intervene in the matter.

    He said: “Based on the intervention of the Commission, the distribution companies have agreed to find a way to restructure the fixed charge such that a consumer who does not receive electricity supply does not pay the fixed charge.

    “This remodeling of the fixed charge will be part of the ongoing tariff review process being conducted by the distribution companies.

    “NERC will continue to ensure that whatever model is presented for its approval is fair and reasonable and ensures the survival of the new electricity market and improves quality of supply to consumers.”

    On the vexed issue of bulk metering of customers, the Commission said it totally agreed with the Senate on the need to eliminate the sharp practice.

    He added that the Commission has however provided a leeway for estimation in situations where residential meters are not provided to customers.

     

  • NERC hailed over fixed charges directive

    The directive that power distribution companies should stop collecting the N750 fixed charges from consumers who do not enjoy power supply for a cumulative period of 15 days will boost the confidence of consumers, stakeholders have said. They include the Director, Infrastructural Development, Manufacturers Association of Nigeria (MAN), Reginald Odiah and former Chairman, Community Development Council (CDC) in Surulere, Lagos, Olukayode Adeyemi

    Odiah said the new power investors and NERC are on the path of restoring confidence into the sector by improving electricity supply. He said consumers’ confidence has waned, following the epileptic power supply and inability to resolve the problem.

    He said privatisation and policies introduced by the Commission to address billing problems are good ones capable of restoring confidence in the industry.

    The investors, and other stakeholders in the sector are making efforts to proffer solutions to the lingering power problems, adding that the directive is a relief to consumers.

    He said: ‘’ With time, the sector would get over infrastructural challenges facing it and produce the required energy for growth.  Once the gas problem is solved, the turbines would help in improving electricity generation. Thereafter,  distribution companies would supply electricity with ease.’’

    Also, Adeyemi said huge charges is one of the problems facing consumers, noting that NERC has boosted industry’s confidence by stopping DISCOs from collecting fixed charges from consumers who do not enjoy electricity for sometime.

    He said illegal disconnection and irregular power supply are a big problem in the sector, adding that the development made the residents of Iponri Estate and its environs to organise a protest least week.

    ‘’ We have made up our mind to stop illegal disconnection in the estate and other areas. We would resist  any official who disconnects light illegally in the area. We have reported the matter to the District Manager of Eko Electricity Distribution Company (EKEDC) in Masha. We would not hesitate to deal with the company‘s staff who disconnects our light wrongly, ”he added.

    He said residents spend about N9.5million monthly to fuel their generators, adding that the problem is affecting them.He said the cost of providing energy is high, adding that it impacted  negatively on cosnumers.

  • Consumers decry increase in fixed charges

    There is concern among consumers over possible increase in fixed charges by the Nigerian Electricity Regulatory Commission(NERC) in June.

    The development is coming on the heels of the commision’s decision to review the yearly fixed charges for residential and corporate consumers in June.

    Consumers, who spoke with The Nation, said any upward review of the charges would further compound their woes.
    A partner at Paul Usoro &Co ( A law firm), Laidi Munirudeen, said the country is in a terrible situation, following the inability of the government to find a lasting solution to the power problem.

    Munirudeen said consumers were paying for electricity they cannot access, adding that they are tired of the situation.

    He said there is no cheering news from the sector, despite of the billions of naira realised from the sale of Power Holding Company of Nigeria (PHCN). He said fixed charges had been increased from N500 in 2012 to N700 last year, arguing that any increase would compound the woes of consumers.

    He said: “It is not an over-statement to say the sector is in a sorry state. In fact, all indices point to the fact that the sector is sick. Of what benefit is the huge bills paid by consumers every month without getting the right value. In my company, we use generators 24 hours, which means we spend a lot on diesels. When you factor the cost of obtaining alternative energy into the production cost, you realise all your profits have gone.’’
    Also, the Chief Executive Officer,New Horizon Computer Limited, Tim Akano, said NERC should be talking of how to cut down all charges and not increasing them in view of the problems facing the consumers and the sector in particular.

    “Already consumers are paying huge bills. Any attempt to upwardly review fixed charges, as stipulated in the MYTO guidelines would worsen the conditions of consumers. In the Information and Communication Technology (ICT) where I work, a lot of money is required to power computers and other devices for the training of people on various skills. This implies that a lot of money goes into generators, aside huge bills paid companies,’’ he said

  • Protests in Edo over BEDC’s monthly fixed charges

    For eight days, members of the Edo State Civil Society groups staged protests across major streets of Benin-City, the state capital. The protests were against the N750 monthly fixed charge demanded by Benin Electricity Distribution Company (BEDC) upon payment of electricity bills, especially for those using pre-paid meters. The protests unsettled the BEDC as they paralysed activities at its premises.

    The protest, which began on March 17, was first taken to the headquarters of the BEDC along Akpakpava Road in Benin-City after which the protesters began to picket branches of BEDC across the state.

    Members of the Edo State House of Assembly, led by Speaker Uyi Igbe, joined the protesters on the first day. The lawmakers marched round the Oba Ovoramwen Square in solidarity with the protesters.

    Founder of One Love Foundation, Patrick Eholor, who was one of the leaders 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 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 the fee increases ever year and as such translates to exploitation, oppression and fraud.

    “The fixed charge is programmed to run for a period of four years in the first instance; from 2012 to 2015. This means that customers in Edo State 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 operations of BEDC is geared towards exploitation, oppression and fraud.”

    Managing Director of BEDC, Mrs. Funke Osibodu, in an earlier reaction to the protest, explained that the fixed charge was not extortion but a charge that enables electricity to be constantly distributed to various homes in the region.

    She said the fixed charge might be re-introduced in a different way because of the huge amount of money they had to pay the generating company to make sure that electricity is evenly distributed.

    She said: “The N750 fixed charge is not a Benin Distribution Company issue; everybody is deducting it. The N750 fixed charge is capacity charge. You know we take supply from transmission and transmission also take supply from Djenko. So, the N750 is the charge for making that power available and having that capacity to make it available. So, once you are connected to us, you pay that fixed charge to us every month.

    “Our bill for power every month is anything between N3.2 billion and N3.6 billion so far. But what we have collected from our customers ranges between N1.8 billion and N2.1billion. The capacity charge is not something we can just decide to suspend and even when it is removed, it will come back to you in a different way because there are parties in the chain of transmission that are constantly working.”

    At another forum with the Edo State House Standing Committee on Energy and Water Resources, Mrs. Osibodu said it was only the National Electricity Regulatory Commission that could scrap the monthly payment of N750 fixed charge.

    Osibodu commended the protesters for engaging in a peaceful protest, even as she admitted that the protests revealed many weak points of the company that needed to be tackled. She also said it will make them be more focused; it will give us the direction as to what her firm required to have the best of electricity supply.

    Speaking earlier during the hearing, the Head of Market, Competition and Rates Division, National Electricity Regulatory Commission (NERC), Dr Haliru Dikko advised the BEDC to provide enough meters for consumers in conformity with the agreements signed with the Federal Government.

    Chairman of the House Committee, Hon. Michael Ezomo, said investigation showed there was no basis for the monthly N750 fixed charge being paid by electricity consumers in the state.

    Governor Adams Oshiomhole, at a meeting with management team of BEDC and the civil society groups, also described the N750 monthly fixed charge as extortion and exploitation of consumers.

    Oshiomhole said the fixed charges and estimated tariff by the electricity company was not only irresponsible, but also crude and illegal, adding that he would not preside over a state and watch Edo people exploited under the guise of fixed tariff and estimated billing.

    He told the BEDC management to invite the officials of NERC to Edo and explain to consumers why the collection of N750 fixed charge.

    ”There is fixed tariff by the new power company. There is no argument about whether or not the tariff or estimated charges are paid. I think I mentioned it that now that the Federal Government has handed over NEPA or PHCN to private investors, it is necessary that you improve on your service delivery to consumers so that they will have confidence in your organisation as failure will spark a revolt from consumers. This is exactly what is happening today.

    “As someone elected to represent the interest of the entire Edo people, I cannot be silent on this type of exploitation by one company which claims that there is somebody in Abuja or somewhere responsible for generation. Therefore, transmission of electricity is not the matter because from what I have gathered from the various speakers, it is certain that what is being done in Edo State does not exist in other states,” he said.

    Governor Oshiomhole urged the BEDC to discontinue their purported disconnection exercise of those who refused to pay estimated bill after paying for meters.