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Tag: The Nigerian Electricity Regulatory Commission (NERC)

  • States have no jurisdiction to deviate from tariffs-NERC

    States have no jurisdiction to deviate from tariffs-NERC

    The Nigerian Electricity Regulatory Commission (NERC) said since States have no jurisdiction over the national grid, they have no power to deviate from the tariff set for the energy supply from the grid. 

    The management made its position known in a Public Notice on the “Application of Multiple Tariff Regimes in Nigerian Electricity Supply Industry.”

    The public notice came on heels of the controversy over the Enugu Electricity Regulatory Commission (EERC) reduction of tariff for the Band A customers in its franchise areas from N209 per kWh to N160/kWh.

    While operators in the NESI value chain such as the electricity Distribution Companies (DisCos) and electricity Generation Companies (GenCos) have condemned the downward review, EERC has based the rate crash on the sufficiency of the Federal Government.

    NERC and the utility providers in NESI

      have however expressed fears that the other states electricity commissions might toe the line of Enugu

    NERC however said: “As States do not have jurisdiction over the national grid and over electric power stations established under federal laws/operating under licences issued by the Commission; they must holistically 

    incorporate the wholesale costs of grid supply to their States without any qualification or deviation in their design of tariffs for end-use customers in order not to distort the dynamics of the market or be prepared to make a policy intervention by way a subsidy for any 

    deviation in the tariff structure that distorts the wholesale generation, 

    transmission and legacy financing costs in NESI.”

    The public notice said NERC’s attention has been drawn to the increasing stakeholders’ concerns on the Tariff Order (Order No. EERC/2025/003)  by the Enugu State Electricity Regulatory Commission (“EERC”) 

    to its Licensee Manpower Electricity Distribution Limited (“MEDL”) 

    that relies exclusively on electricity supply (generation and 

    transmission) from the national grid. NESI stakeholders, according to NERC, have expressed concern about the consequences of the reduction of tariffs for Band A customers in MEDL’s network area to NGN160.4 per kWh and the freezing of tariffs of customers in the other bands on the wholesale generation and transmission costs along with the financing costs for legacy obligations in NESI. 

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    NERC insisted that the N160.4/kWh was predicated on an assumption of N45.7/kWh subsidy payment.

    Continuing, the commission said “Section 34(1) of the EA places a statutory obligation on the 

    Commission to “create, promote and preserve efficient electricity 

    industry and market structures, and ensure the optimal utilization of 

    resources for the provision of electricity” and we are also aware that 

    EERC as a sub-national electricity regulator also has a similar statutory 

    obligation in their enabling law; and neither NERC nor EERC as 

    responsible regulatory institutions would take decisions that expose 

    the national grid and wholesale electricity market to a financial crisis in 

    contravention of express powers granted to them by the Constitution.

    “All stakeholders are advised to note that the Commission is currently engaging EERC on their tariff order as it relates to any perceived area of misinterpretation/misunderstanding on wholesale generation and transmission costs on their import of power from the 

    national grid and grants further assurances of its unwavering statutory 

    commitment that the electricity market will be made whole in terms of cost recovery in compliance with the laws of the Federal Republic of Nigeria.”

  • The cap fits

    The cap fits

    Pursuant to Section 34(1)(d) of the Electricity Act 2023 (EA 2023), the Nigerian Electricity Regulatory Commission (NERC) has fined eight Electricity Distribution Companies (DisCos) N628.03 million for flouting the capping of estimated billing for unmetered customers.

    The DisCos are: Abuja, Eko, Enugu, Ikeja, Jos, Kaduna, Kano, and Yola electricity distribution companies.

    Coming at about the time that the Deputy Governor of Lagos State, Obafemi Hamzat, cried out last week Monday that his electricity bill witnessed an astronomical rise within one month, the public outcry against estimated or crazy bills, is real. According to Hamzat, his electricity bill jumped from N2.7m in March to N29m in April!

    Hear the deputy governor: “Last month, in my house, or the state house that I live in, the bill was N2.7m last month. This month, Eko DisCo sent us a bill of 29m. I sent it to the Commissioner for Energy. It’s crazy. I actually procured a meter. I bought a meter to say, ’Look, don’t give estimated billin’g. I bought the meter, but to convert it is wahala,” he lamented.

    That must surely find space in The Guinness World Records!

    Anyway, NERC said in a release that the sanction was sequel to a review of billing practices between July and September 2024, which showed that the DisCos failed to adhere to monthly energy caps issued by it.

    According to the commission, it had issued the energy caps to guard against over-billings, the very regulation that the DisCos breached.

    “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.”

    There is no gainsaying that many DisCos have been observing this regulation in the breach. As a matter of fact, it is clear that the DisCos have never liked the idea of power consumers being metered, preferring instead, to be issuing them estimated bills without any logical basis of how they arrived at them. Hamzat said this much; that despite having paid for prepaid meter, the DisCo supplying him electricity has not brought one.

    It was only a matter of time for the strident cries of the consumers to get to the ears of the government.

    It is true that the DisCos inherited the problem of estimated billing from their predecessor, the Power Holding Company of Nigeria (PHCN), which in turn inherited it from the defunct National Electric Power Authority (NEPA).

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    But then, it is over 11 years that the country’s power sector was privatised. In other words, it is over a decade that the DisCos took over and we are here still talking about a crucial tool like prepaid meters which they ought to have brought along while taking over the entities at privatisation in 2013.

    To date, the metering gap is still about 50 per cent, in spite of the efforts by the Federal Government to close it.

    We commend NERC for the N628.03million sanction on the DisCos. The amount may look hefty but, against what the DisCos illegally raked from their customers, it is not much. The fines, according to the regulator, represent a paltry five per cent of the gross overbilling during the period under review. The icing on the cake is NERC’s order to the DisCos to give credit adjustments to the hapless overbilled customers by May 15, 2025, which is the end of the April billing cycle.

    But NERC should not make such an exercise one-off. Rather, it should be periodic. The fact of the matter is that many, if not most of the DisCos would never want customers metered because that is the only way they can continue to get revenue for supplying Nigerians with darkness.

    We want to believe that they are too steeped in the iniquity of overbilling that they cannot repent and do business in accordance with best global practices.

    Now that the market has been liberalised, more and more state governments should start or accelerate the process of having more players in the sector. This is better than keep complaining over their fraudulent activities. They need such therapy to whip them into line.

    Perhaps now that the inexplicable estimated billing is now getting to the high and mighty, the government would be compelled to do something to check the ugly trend.

  • Architect of first NERC regulations Shittu Shaibu retires

    Architect of first NERC regulations Shittu Shaibu retires

    The Nigerian Electricity Regulatory Commission (NERC) Consumer Affairs, Commissioner Aisha Mahmud has paid tribute to Dr. Shittu Shaibu, the former Senior Manager and Consumer Affairs General Manager, for his foundational contributions to the Nigerian Electricity Supply Industry (NESI) regulations.

    Speaking at a three-in-one retirement ceremony in Abuja over the weekend, Mahmud, highlighted that Shaibu played a pivotal role in shaping the commission’s regulatory framework from the ground up, despite the absence of legacy documents.

    She noted that Shaibu, who was transferred to NERC from the Bureau of Public Enterprises (BPE), was instrumental in the commission’s early development, and his contributions are integral to the history of the commission.

    He said: “He is one of the best staff we have. I met Shittu some 17 years ago when I joined the commission.

    “What most of you don’t know is that Shittu and a few staff started the commission from scratch.

    ”He joined from BPE and when he joined the commission there was no single document on regulation.

    “What we had was the National Electric Power Policy. So, there was no regulation, no guideline to guide investors’ participants.

    “Shittu and his team were the ones who put up these documents. So, we cannot talk about the history of NERC without talking about Shittu Shaibu.”

    Expressing gratitude to the celebrant, she recalled how he was always asking what would become of the commission upon Shaibu’s retirement.

    She was however optimistic that the former Consumer Affairs General Manager had trained his staff who now drive the department and industry forward successfully.

    She said: “On behalf of the chairman, Vice Chairman, commission, and the entire staff of NERC, we thank you immensely, Shittu Shaibu for all you have done, not just for the commission but for the entire electricity sector.

    “I used to ask what would happen to the entire commission if Shittu leaves. But Shittu would say don’t worry I have trained my staff and I know that you are in good hands.

    “And truth to his words, he did a very good job in training of the CF Division. I know that they are doing perfectly well to move the industry forward.

    Shaibu, said the commissioner, is very slow to anger as nothing unsettles him.

    “One thing you don’t know about Shaibu is that he doesn’t get upset, nothing bothers him, he doesn’t get angry over anything,” said the commissioner.

    The celebrant was instrumental in the implementation of the Meter Asset Providers (MAP) and the National Mass Metering Program which have the largest improved metering access and reducing billing disputes.

    Shaibu rose from being a Senior Manager to becoming the Head and General Manager, Consumer Affairs when he hit his retirement age on 10th October 2024.

    He was basically described as the General Manager with the listening ear, members of the commission both serving and retired turned out to grace his three-in-one ceremony.

    He celebrated his retirement, and 60th birthday, and launched his book titled: “The Unwitting Leader’s Success Manual.”

    Those who grace the occasion were NERC Commissioner of Consumer Affairs, Aisha Mahmud, former NERC Chairman, Dr. Sam Amadi, former Independent National Electoral Commission (INEC), Dr. Muhammed Mustafa Lecky, and so many other great sons and daughters of Auchi Kingdom.

    Asked what was his unforgettable moments in the commission, Shaibu said recalled that in 2005, a historic moment marked the birth of the NERC with him having the privilege of working there.

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    He also said: “Nigerian Electricity Regulatory Commission (NERC), and I was honored to be part of the pioneering core team that transitioned the Commission from the Bureau of Public Enterprises (BPE).

    “It was the start of an incredible journey, one where my passion for consumer advocacy and service delivery would find its home.

    “One of my proudest accomplishments was setting up the Consumer Affairs Division.

    “Drafting, reviewing, and defending customer protection regulations before the Commission for approval was no small feat. It was a labour of love, culminating in a monumental achievement: organizing the very first national consumer stakeholder engagement in 2006.

    “Watching consumers and stakeholders engage in meaningful dialogue was a moment of fulfillment that still inspires me.”