Going forward, electricity consumers in Nigeria would no longer pay the fixed charge included in monthly electricity bills issued by the 11 electricity distribution companies (Discos) in the country but will pay higher tariffs for electricity consumed, the Nigerian Electricity Regulatory Commission (NERC) said monday.
NERC said in Abuja that the new electricity tariff regime, which it approved over the weekend, has effectively removed the contentious fixed charges for all classes of electricity consumers in the country.
It explained that Discos would from the next billing period, not charge their customers monthly fixed charges under the new tariff regime.
It however approved a slight increase in energy tariffs for the different classes of consumers to be charged by the Discos.
The fixed charge is that component of the tariff that commits electricity consumers to paying an approved amount of money mostly on a monthly basis, irrespective of whether electricity is consumed during the billing period or not.
NERC said in a statement that under the new tariff regime, electricity consumers would now only pay for what they consume monthly (pay-as-you-consume).
Its chairman, Dr. Sam Amadi, said that the commission acted in good faith to both consumers and operators in line with its mandate to enthrone regulatory transparency in the country’s electricity market.
“This is good news for electricity consumers who have long asked for more just and fair pricing of electricity.
“The regulatory commission 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,” he explained.
While acknowledging that electricity tariffs have been increased, Amadi said all electricity consumers – residential and commercial – would no longer pay fixed charges, so their total bills would reflect the electricity they consume and might be reduced when they conserve electricity.
“Consumers will no longer be spending money every month to pay for fixed charges even when they do not receive electricity in their homes and businesses.
“The objective of the new tariff is to enable prudent consumers to save money on electricity bills as they can now control their consumption and not pay the monthly fixed charges,” Amadi said.
Giving some insight into the new tariff structure, NERC disclosed that residential consumers classified as R2 under the Abuja Disco coverage area, would no longer pay N702 as fixed charge every month but their energy charge would increase by N9.60 per kilowatt/hour (Kwh).
Residential consumers under the same category covered by Eko and Ikeja Discos will no longer pay the N750 fixed charge but will see their tariffs increase by N10 and N8 per Kwh increases respectively.
Similarly, N800 and N750 fixed charges would be taken away from R2 consumers covered by Kaduna and Benin Discos respectively, but they will pay N11.05 and N9.26 per Kwh.
NERC also explained that the new tariffs would be reasonable for commercial consumers in the C2 category which paid N17,010 and N22,141 as fixed charges to Ibadan and Enugu Discos respectively. C2 consumers instead will see their energy charges increased by N12.08 and N13.35 per Kwh respectively.
The commission however asked consumers to look out for the full details of the new tariff regime, which it said would be published across board in line with its transparent operational model.
It added that the new regime comes with key performance benchmarks such as a renewed commitment by the Discos to rapidly improve the quantity and quality of electricity supply to consumers.
NERC noted that the commitment was included in the service level agreements they signed as part of the performance level agreements executed during the sale of the assets by the federal government.
According to the commission, the tariff order also encourages the Discos to develop new sources of supply within their franchise to increase the quantity and quality of supply to target customers on a willing buyer-willing seller basis.
It said it initiated these measures to improve electricity supply across Nigeria and ensure that the Discos work to increase investment that would ensure stability in power supply.
NERC equally said all Discos would have to meter all its customers, as the metering policy it signed into law would be strictly enforced.
“For those willing electricity customers who paid for meters under the Cash Advance Payment Metering Initiative (CAPMI) but are yet to be metered within the allowable 60 days, they would no longer be billed by the electricity distribution companies under the new tariff regime.
“The Discos will not disconnect them. There is zero tolerance for overbilling of customers. An unmetered customer who is disputing his estimated bill would not be expected to pay the disputed bill.
“He would pay his last undisputed bill as the contested bill goes through the dispute resolution process. This is a departure from the old practice which prescribed that customers should first settle the bill while the dispute resolution was in process,” added Amadi.
He explained further: “The new tariff regime is the result of a transparent, rigorous and credible rate review process. The tariffs will lead to greater reliability in the provision of electricity.
“More people will progressively have access to the grid, more meters will be deployed and the need for self-generation would be gradually reduced.”
He also stated that NERC would not allow Discos to connect new customers without first metering them, adding that the measure would help close the wide metering gap of over 50 per cent and reduce high incidence of collection losses in the market.
But as NERC announced the new tariff regime, the federal government monday failed to announce replacements for Amadi and his commissioners at NERC whose five-year tenure ends today.
Amadi; deputy chair, Muhammed Bello; Commissioner for Legal, Licensing and Enforcement, Steven Adzinge; Commissioner for Finance, Mary Awolokun; Commissioner for Market Rates and Competition, Patrick Umeh; and Commissioner for Engineering, Safety and Standards, Abba Ibrahim, were appointed on December 22, 2010.
According to Section 35(5) of the Electric Power Sector Reform Act (EPSRA), all appointments and reappointments of commissioners for NERC shall be made before the expiration of the terms of office of the outgoing commissioners.
THISDAY’s attempt to confirm the position of the government on their replacements from the Minister of Power, Works and Housing, Mr. Babatunde Fashola, yielded no result, as the minister did not respond to a call and text message to his phone.
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