NERC Fines DISCOs N10.5bn For Violating Capping Order For Unmetered Consumers

The Nigerian Electricity Regulatory Commission (NERC) yesterday announced that it had sanctioned the 11 electricity Distribution Companies (Discos) operating in the country over non-compliance with capping of estimated bills for unmetered customers nationwide.

In 2020, the industry regulator had in furtherance of its mandate to ensure an efficient and fair electricity market introduced an order to cap the amount that a distribution company could charge an unmetered consumer until he or she is metered.

At the time, the NERC had said setting the cap at a level would protect unmetered customers and provide sufficient incentives for the Discos to quickly meter such customers.

The context of the regulation, it said, was the realisation that distribution companies were not doing enough to meter unmetered customers since the takeover of the network by the preferred bidders on November 1, 2013.

“This has led to overbilling of customers especially in the face of dwindling supply of electricity,” it said.

But for flouting the rules, NERC in a statement, imposed a N10.5 billion fine on the electricity distribution companies.

A cursory look at the infractions carried out by individual Discos showed that they may have ripped off Nigerian electricity consumers to the tune of N105.05 billion in the first nine months of 2023.

It showed that Abuja Electricity Distribution Company (AEDC), for example, over-billed its customers without meters to the tune of N17.8 billion, while Eko Distribution Company (EKEDC) exceeded its normal capping by N13.137 billion.

For Port Harcourt Electricity Distribution Company (PHEDC), it was N14.187 billion, Kaduna Electric was N1.145 billion, while for Yola Disco it was N541.88 million.

In the same vein, Kano electricity Plc over-billed its customers to the tune of N196.9 million, according to the NERC document.

NERC ordered the Discos to refund the customers in full and to ensure compliance in the future, before imposing a 10 per cent fine on the utilities.

For Eko Disco, for instance, just like other power distributors, the commission said that to forestall further non-compliance, a deduction of N1,413,766,176 which is equivalent to 10 per cent of the Naira value of the total over-billing for the period January – September 2023 circle shall be applied to its OPEX over a rolling 12-month period during the next tariff review.

“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 Discos’ billing of unmetered customers for 2023 has revealed non-compliance with the monthly energy caps issued by the commission,” NERC stated in the statement.

In response to this and in a bid to safeguard unmetered customers from arbitrary billing by Discos, the commission said that pursuant to Section 34(1)(d) of the Electricity Act 2023 (EA), it had issued the order on non-compliance with capping of estimated bills (order No: NERC/2024/004-014).

This, it said, include credit adjustment to customer, wherein 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.

“Discos have been directed to publish the list of credit adjustment beneficiaries in two national dailies and on their website no later than 31st March 2024.

“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.

“The commission reaffirms its commitment to regulatory compliance and consumer protection within the Nigerian Electricity Supply Industry (NESI),” it added.