BusinessDay
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‘Crazy bills’ to get worse as new electricity tariffs start July 1

From July 1, 2020 electricity customers in Nigeria will see their bills go up between 10 and 30 percent based on how many hours of power they get daily, but customers on estimated billings will pay even more as there won’t still be a way to measure their use.

 According to the Nigerian Electricity Regulatory Commission (NERC), a government-funded agency that regulates the sector, of the 10,374,597

registered electricity customers, only 3,918,322 (37.77 percent) have been metered as at the end of the fourth quarter of 2019.

  “Thus, 62.37% of the registered electricity customers are still on estimated billing which has contributed to customer apathy towards payment for electricity,” the Commission said.

BusinessDay gathered exclusively that NERC has negotiated six tariff bands that will ensure that payments can reflect the quality of services offered.

Band A is for customers who get 20hours of power and above daily, Band B has customers who get power for 16 hours daily, C-band has customers who enjoy power for 12 hours and above a day. Those that enjoy power for 8hours and above is D-band and E-band has customers who only get 4 hours and above but below 8 hours of power supply daily.

Under the plan, there will be no increase for customers in Band E and those called lifeline customers irrespective of how much power they get every day.

However, customers on estimated billing without a way to measure the billings could see a more significant rise in their tariffs, and Electricity Distribution Companies (DisCos), will make up expected higher collection losses on the back of unmetered customers.

“It will get complicated,” said Chuks Nwani, an energy lawyer based in Lagos, an admission of the difficult situation unmetered customers would face.

In February, NERC issued an order placing a limit on how much DisCos can charge some residential and some commercial customers on estimated billing and capped bills of single-phase, small users, to N200 per month until they are metered.

But the regulator has been unable to enforce this rule largely because it is not pragmatic to pressure DisCos to pay for the electricity that was generated and sent to them when many customers lack meter.

NERC approved the 2007 Meter Reading, Cash Collections and Credit Management regulation, empowered DisCos to bill customers by estimation when they are unable to gain access to his premises but it has been so abused and now is the single most painful source of frustration for customers accounting for 65 percent of all complaints lodged at DisCos offices across Nigeria, according to NERC’s data.

The regulator’s most recent effort to compel DisCos to meter customers through a Meter Asset Provider regulation, wherein third-party investors buy the meters and resell to customers through DisCos for profit, was scuttled when the Federal Government introduced a new 35 percent levy on meters.

 The new service-reflective electricity tariff model was introduced because the Federal Government is no longer able to subsidise electricity following fall in crude oil income and COVID-19 which has paralysed economic activities globally.

The negotiated tariff model does not emphasize only recovering cost but also ensuring that customers get service that reflects what they pay for power and compensates them if they are not treated fairly.

 

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