The Nigeria Electricity Regulatory Commission (NERC) has ordered the Abuja Electricity Distribution Company to refund the sum of N50m to its consumers in the Federal Capital Territory for over-billing them despite erratic power supply to homes and business premises.
Chairman/Chief Executive Officer of NERC, Dr. Sam Amadi, stated this in his response to a query issued to his commission by the Senate on fixed charge, estimated billing and sundry issues.
Amadi, had on Friday explained that his agency monitored all complaints reported to Discos on a monthly basis and had carried out analysis on them.
He said, “The Commission has recently penalised Abuja Electricity Distribution Company for overbilling its customers and ordered it to refund the overbilled amount and also to apologise to the customers for wrongful estimation.
“Abuja Electricity Distribution Company has refunded about 32,000 customers so affected. The refund ranged between N5,000 and N15,000 per customer, adding up to over N50m.”
The NERC boss explained that the commission established the forum office made up of representatives of key stakeholders like the Manufacturers Association of Nigeria, the Consumer Protection Council, the Nigerian Society of Engineers and representatives of local Civil Society Organisations.
He said the members elected their own chairman and address complaints from consumers, adding that their decisions, if not appealed against, are enforced by the commission.
He said Disco had been mandated to establish functional Customer Complaints Units to receive and resolve all complaints from customers on electricity supply within its area of operation.
According to the NERC chief, a timeline of 15 days had been specified in the regulation for the resolution of complaints by electricity customers, after which an appeal could be lodged at the Forum Office, established for that purpose.
Amadi said, “The Forum Office represents the next level where electricity customers can seek redress from the non-performance of Discos in resolving their complaints.
“Presently, NERC has established at least one Forum office in all the Discos to act as an appellate body in resolving complaints from electricity customers not satisfactorily resolved by the Customer Complaints of Discos.”
He added that the commission agreed with the Senate’s position on the need to eliminate the practice of bulk billing of residential customers and to replace the practice with individual metering and billing.
Amadi continued, “It is important to state that the commission had previously abolished bulk billing in its ruling on the VGC CASE NO:NERC/H/03/07. This case was brought by a customer against the VGC Estate Management and the Eko Electricity Distribution Company in 2008.
“The commission ruled in favour of the customer. The decision of the commission stipulated that every customer is expected to be metered individually, irrespective of the status of supply coming into the area and the class of billing should be on R2 or as appropriately determined by Disco.
“The commission has, however, provided a leeway for estimation in situations where residential meters are not provided to customers. This is provided in the Estimated Billing Methodology Regulation of the Commission.
“In this instance, statistical meters installed at transformer sub stations are used to calculate the energy to be used as a basis for estimating customers on the feeders.
“Communities who are placed on bulk billing should reject it and insist on individual metering. The Commission is in the process of completing public consultation on a proposal to cap the amount an unmetered customer can pay until he or she is metered.
“The proposal will also commit distribution companies to strict deadline for metering of all its customers. In the interim,the Commission has abolished connection of new customers without meters.”
The NERC boss further stated that the fixed charge that consumers pay in the Nigerian electricity market was not illegal or necessarily fraudulent.
Rather, the fixed charges, he said, were part of the electricity markets across the world, but noted that the difference in Nigeria was that there was no good supply of electricity owing to lack of generation capacity.
He said despite the poor power supply, consumers across the nation were paying fixed charges for epileptic or no power supply, just for Discos to recover the capital and fixed cost of the various operators in the industry.
Said he, “Section 32 of the EPSR Act 2005 mandates the commission to approve tariff that allows investors recover their prudent cost with reasonable return on the assets invested in the business.
“The operators invest in assets on a regular basis and recover their investment through fixed charge paid by the consumers.
“In addition to this, it should be noted that once an asset is bought and a consumer is connected to the network, the utilities by law are expected to recover the cost of that investment whether energy is supplied or not.
“Secondly, fixed charge is not tied to consumption as stated above and it is not peculiar to Nigeria alone. Many utilities all across the world charge fixed charges.
“In essence, it is a universal practice, as obtained in many countries all over the world. Fixed charge is separately identified on bills in most countries, and is often called the ‘daily supply charge’ or ‘service to property’ charge.
“It can be displayed as a daily rate on customer’s bills in some countries, but may appear as a single figure for a billing period.The generators are paid both capacity and energy charge.”
