In response to unending compaints over the billing method adopted by electricity distribution companies, the Nigerian Electricity Regulatory Commission (NERC) has called the methodology introduced for charging unmetered customers as a "complete failure".

In a consultation paper released by the regulator on October 12, 2018, it said it proposed two options of scientifically determining what consumers consume, in order to find an objective price.

According to the commission, the consultation paper is purposed to solicit comments from stakeholders on the setting aside of the existing estimated billing methodology and explore various options provided in the document to cap the monthly estimated bills issued to customers in line with the previous charge(s) applicable to the different tariff classes.

The first option identified to cap monthly electricity bills is charge customers based on the average energy delivered to each class of customers in accordance with its 2015 Multi Year Tariff Order (MYTO).

“The average energy as provided for in the Multi-Year Tariff Order, 2015 for each Disco would form the basis for computing the maximum cap for each category of customers to be affected.”

Factors to be evaluated under this option; are tariff class, customer numbers under each tariff class, proportion of number of customers per tariff class to the total number of customers, annual consumption in gigawatts, and annual consumption in kilowatts, among others.

These variables would then be used to derive the average monthly individual consumption in kilowatts per tariff class, which would represent the cap.

“Option two takes into consideration actual energy delivered to metered customers as the basis for deriving the caps of the various categories of unmetered customers. In arriving at the capped figure, the energy consumed by the metered customers is subtracted from the total energy delivered and forms the basis for determining the caps,” NERC stated.

NERC said the distribution companies had a mandate to meter customers five years from the point of privatisation. The inability of the distribution companies to execute the agreement, led to the creation of the Methodology Estimated Billing (MEB). However, the discos have been unable to implement the billing effectively.

NERC said "it is fully aware that the DISCOs have a contractual obligation under the privatisation programme to meter all their customers within five years as contained in the performance agreement signed with the Federal Government of Nigeria.

“This metering obligation has, however, not been fully met by the distribution companies, leading to mounting complaints on the side of the customers.

“This was a complete failure owing to the DISCOs’ inability to effectively implement the guidelines. It is apparent that the prevailing regime of estimation under the commission’s approved MEB has not been effectively and accurately implemented in all the distribution licensees. This has led to considerable burden being placed on unmetered customers, who ultimately are beset with outrageous and very high estimated bills that are not objectively determined.”

As at the end of March 2018, NERC said 8,135,730 are registered electricity customers. Of this number, only 3,434,003 (about 42 per cent) had been metered.

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