Abolishing of estimated billing

The Nigerian Electricity Regulatory Commission (NERC) last week abolished the contentious estimated billing for unmetered customers by the 11 electricity distribution companies (DisCos). NERC Order 197 was issued by the Chairman, Prof. James Momoh and the Commissioner, Legal, Licencing & Compliance, Dafe Akpeneye. The new order, which took effect Thursday last week, repeals the 2012 […]

The Nigerian Electricity Regulatory Commission (NERC) last week abolished the contentious estimated billing for unmetered customers by the 11 electricity distribution companies (DisCos).

NERC Order 197 was issued by the Chairman, Prof. James Momoh and the Commissioner, Legal, Licencing & Compliance, Dafe Akpeneye. The new order, which took effect Thursday last week, repeals the 2012 estimated billing regulation.

“The Estimated Billing Methodology Regulation is hereby repealed and shall cease to have effect as a basis for computing the consumption of unmetered customers in NESI,” the commission said.

The Order bars DisCos from charging residential customers (R2) above N1, 800 monthly until they get meters. This is equivalent to 78 kilowatt hour (kwh) of energy monthly.

Also, residents that consume less than 50kwh will be billed at N4 per kwh and a maximum of N200 monthly.

NERC directed that all unmetered residential and commercial customers shall not be invoiced if they are not metered by April 30. They should also remain connected to power supply.

Customers that reject the installation of meters on their premises by a DisCo shall not be entitled to supply and must be disconnected, it said.

According to the NERC, the distribution companies are not doing enough to provide meters to 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. Worse still, estimated billings are arbitrary, exorbitant, oppressive, unjustifiable, and, therefore unacceptable.

The power sector reform was meant to develop competitive electricity markets. It is sad to note, however, that seven years on, none of the key elements of the reform has been met. These include the provision of adequate transformers, upgrading and the extension of distribution lines and the metering of all electricity consumers within three years of the takeover.

It is disheartening that the DisCos have not demonstrated the least intention to invest in the power sector. That may explain why they are always crying for a bailout from the government. They want to reap where they have not sown. At the moment, there isn’t the slightest evidence that this attitude would change.

The consequence of this to the nation and its citizens is huge.  First, the number one victims are the consumers who continue to pay through the nose for services not rendered.

The main reason for low rate of metering has been the inadequate financial liability of the sector. We agree with NERC that this excuse is no longer tenable because the Credited Advanced Payment for Meter Implementation (CAPMI) provides DisCos with the opportunity to finance metering through consumer finance but which has not been utilised.

Secondly, the generation companies also suffer enormous losses. Power generation is nearing nine thousand MW at the moment but this counts for nothing because the DisCos often times reject half of the power on offer chiefly for lack of capacity.

An effort by the NERC to issue this same order in June 2015 was frustrated by the DisCos and it was forced to suspend it. Further attempts were made in 2018 and 2019 but they did not see the light of the day.

It is gratifying that the NERC has finally summoned the courage and issued the order even though it is long overdue.

However, there are genuine fears among stakeholders that the new order lacks proper enforcement plan.

They also stress the need for education and public enlightenment, especially at the grassroots. The commission should waste no time in addressing these concerns.

The order was well received nationwide and is even rated as one of the best decisions taken by the government in recent years. This paper will, therefore, strongly urge that from this moment there should be no going back.