The Nigeria Electricity Regulatory Commission (NERC) has finally bowed to popular demand and protests by Nigerians against payment of fixed tariff for services they did not enjoy from electricity distributors.
Meanwhile, no electricity distribution company is allowed to connect new customers without metering the customer first. This is to close the wide metering gap of over 50 per cent and reduce high incidence of collection losses in the Nigeria Electricity Supply Industry (NESI).
Since electricity distribution was handed over to private firms about two years ago, consumers across the country have been subjected to paying fixed charges ranging from N220 to N750 or even more depending on the location.
The development had pitched the nation’s electricity regulator, NERC, against Nigerians who felt cheated because only the companies had been enjoying protection from the agency, while they continued to pay heavy fees, without commensurate electricity supply.
However, victory eventually came the way of the sulking consumers recently, due to sustained pressure from the public at various levels and indeed, the intervention from the National Assembly, directing NERC to stop further fixed tariff charges and allow consumers pay only for what they consume in a month or within certain payment period.
According to NERC, which last week, ordered distribution companies to stop the charges, consumers will no longer pay monthly fixed charges as from the next billing period.
The regulatory agency said in a statement that the new electricity tariff regime approved at the weekend, has removed fixed charges for all classes of electricity consumers.
Fixed charge is that component of the tariff that commits electricity consumers to paying an approved amount of money, not minding whether electricity was consumed during the billing period.
Under the new tariff regime, electricity consumers will now pay for only what they consume from month to month.
Chairman of NERC, Dr. Sam Amadi, said: “This is good news for electricity consumers, who have long asked for a just and fairer pricing of electricity.
“The regulatory commission had 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.”
Although the new tariff regime came with an increase in energy charges, all electricity consumers – residential and commercial – will no longer pay fixed charges. Their bills will henceforth, depend on the electricity they actually consume and may be reduced when they conserve electricity. Consumers will no longer pay fixed charges even when they did not receive electricity in their homes and offices. According to the chairman of NERC, “The objective of the new tariff is to enable prudent consumers to save money on electricity bill as they can now control their consumption and not pay monthly fixed charges.”
For instance, residential customer classification (R2) in Abuja Electricity Distribution Company will no longer pay N702 fixed charge every month. However, their energy charges will increase to N9.60. Also, residential customers (R2 customers) in Eko and Ikeja electricity distribution areas will no longer pay N750 fixed charges, but they will get N10 and N8 increase respectively, in their energy charges. Similarly, the burden of N800 and N750 fixed charges would be lifted off the shoulders of Kaduna and Benin electricity consumers respectively, but they will have an increase of N11.05 and N9.26 respectively in their energy charges.
The new tariff is also good news for commercial consumers. For example, commercial customers’ classification C2 in Ibadan and Enugu, will no longer pay fixed charges of N17.01 and N22.14. Their energy charge will however, increase by N12.08 and N13.35 respectively.
In line with the transparent disposition to its operations, full details of the new tariff regime would be advertised in major national dailies and the Commission’s website.
Besides this cost- saving element, the new tariff regime comes with renewed commitments by the electricity distribution companies (discos) to rapidly improve the quantity and quality of electricity supply. These commitments are contained in service level agreements, which are based on the performance level agreements submitted by the new owners during the bid process. The tariff order also encourages the distribution companies to develop new sources of supply within their franchises to increase the quantity and quality of supply to target customers on a willing- buyer -willing seller basis. These measures are necessary to improve electricity supply across Nigeria and ensure that the distribution companies are working hard to increase investment that will ensure predictable and ultimately reliable and uninterrupted electricity supply in the country.
Henceforth, every disco should meter all its customers and the metering policy will be strictly enforced. For the electricity customers, who paid for meters under the Cash Advance Payment Metering Initiative (CAPMI) but were yet to be metered within the allowable 60 days, they will no longer be billed by the electricity distribution companies under the new tariff regime. Also, the discos will not disconnect them. There is zero tolerance for overbilling of customers. An unmetered customer who is disputing his estimated bill will not be expected to pay the disputed bill. Instead, he will pay his last undisputed bill, while the contested bill goes through the dispute resolution process. This is a departure from the old practice, which stipulated that customers should first settle the bill, while dispute resolution is in process.
According to the Commission, “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.”
The Commission stated that it expects the electricity distribution companies to provide better customer service in all aspects of their operations, stressing that it would hold them responsible for their service level agreements.
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