Panic grips Lagos DISCOS over NERC’s sanction

The two Electricity Distribution Companies in Lagos, Eko Distribution Company, EKEDC and its counterpart, Ikeja Distribution Company, IKEDC, have been gripped in panic, following Nigerian Electricity Regulatory Commission’s (NERC) resolve to sanction more distribution companies in the country for indiscriminate over billing and hiking of the cost of electricity meters without its approval.

The order of NERC came against the backdrop of several complaints it received from electricity customers across the country, over high estimated billings, hike in the cost of prepaid meters and poor service delivery.

The customers have reported that the DISCOs have refused to comply with the commission’s order on the implementation of the Credited Advance Payment for Metering Implementation (CAPMI), aimed at fast tracking the pace of customer’s metering.

Demonstrating its capacity to sanction the electricity companies for disobeying some of its order, the commission after its notice of enforcement and subsequent investigation of instances of overbilling perpetrated by the electricity distribution company across the country, last week ordered the Abuja Distribution Company, AEDC, to make a refund to electricity consumers, for the outrageous bills it issued within its franchise area.

The Chairman of NERC, Dr. Sam Amadi, in an exclusive chat with Hallmark, revealed that the commission is also examining the documents and records of other DISCOs across the country, adding that it would act when it has been able to establish evidences against the companies.

According to him NERC is monitoring the various complains it received from the electricity consumers across the country.

Defending its position on the hike in sales of prepaid meters under the CAPMI scheme, Amadi noted that the commission did not approve the increase in the cost of meters by the DISCOs.

According to him, the cost of the meters was arrived at by the relevant agencies of the government with the inputs from the stakeholders including the DISCOs, vendors and installers, using the standard market price plus the most efficient installation costs.

Meanwhile, NERC’s sanction has however sent shivers down the spine of other distribution companies across the country that had subjected their customers to unapproved methodology for estimated billing of electricity consumption.

Investigation shows that the DISCOs had over the years taken advantage of the ineffective regulatory framework to over-billed unsuspecting customers.

The electricity consumers have alleged that the DISCOs, especially in Lagos franchise areas, have despite poor electricity supply, witnessed across the state, hiked the cost of acquiring prepaid meters citing the recent devaluation of the naira by the Central Bank of Nigeria (CBN) as reasons for the new fee.

The customers complained that the distribution company have increased the cost of purchasing single-phase meter under the CAPMI scheme to N39, 375, amounting to an increase of 56 per cent against the official price of N25,000.

They also alleged that the three-phase meter which had been sold for N50, 000, has been increased by almost 20 per cent to about N60, 909.

In a telephone chat with Mr. Olanipekun Adeyanju, who is the spokesperson for the IKEDC, he revealed that his company was aware of the order by NERC to AEDC, but was not sure if the order would be extended to his company. He noted that it would be early to preempt the action of the commission, adding that it is within the prerogative of NERC to identify companies that have defaulted.

 He further noted that his company has not been served any notice by NERC, adding that the company would comment on the order, if the commission is not satisfied with its operations.

Corroborating his position, the Public Relation Officer- PRO, of EKEDC, Mr. Peter Ayiwe, also noted that the company has not received any order from NERC, over any forms of refund. According to him, the company has fared well in ensuring that the interest of the customers is protected.

Meanwhile, NERC has ordered AEDC to immediately commence the refund through energy credit of all excess charges billed its customers as a direct consequence of the adjustments” in estimated methodology in some of the company’s business units.

The order came after it had investigated AEDC for arbitrary imposition of random figures on clusters of its customers ranging from 18 to 28 per cent between October and December 2014 and in some cases 1,100 per cent increase, which resulted in spike in customers’ bills as against the provisions of the Methodology for Estimated Billing Regulations 2012.

The electricity distribution company was said to have tripled its customers bills issued in September 2014 and issued it as bills for October 2014, without evidence of a commensurate increase in electricity supply within the same period.

The Commission further ordered AEDC to within five days notify the affected customers of the overbilling in writing in line with Regulation 9 (7) of the Nigerian Electricity Regulatory Commission’s Meter Reading, Billing, Cash Collections and Credit Management for Electricity Suppliers Regulation 2007.

It said that the notice was a follow up action to previous investigations and forensic observations of electricity distribution companies’ operations through which an unusual increases in estimated billings of electricity consumers were observed within the last quarter of 2014 by NERC.

In another twist, Mr. Tomi Akingbogun, the interim President of Nigerian Electricity Consumers Advocacy Network, NECAN, revealed telephone conversation with Hallmark, that the sanction of NERC on the DISCO is a game planned to deceive the electricity consumers.

According to him, the sanction is a coordinated attempt to play upon the intelligence of unsuspecting electricity consumers across the country.

”I don’t understand why NERC would give an order with an ultimatum for the DISCOs to report back to the commission after two months over its compliance with the sanctions meted on it.”

Akingbogun lamented.

Adetokunbo Mumuni, Executive Director of Socio-Economic Rights and Accountability Project SERAP, noted that the commission may now be  acting because of the fear that the new government will not tolerate the rot being perpetrated within the power sector.

He added that NERC had allowed the distribution companies to exploit electricity customers for so many years without sanction.

According to him, Nigerians have been subjected to untold hardship due to over billing and undue estimated tariff plan.

He noted that the estimated bill charges is fraudulent and must be strapped by the new government.

”A situation where electricity consumers are made to pay for electricity charges not consumed is not only questionable but fraudulent.

The DISCOs are supposed to charge customers based on the rate of consumption through reading of the meters.

It is also ridiculous that most electricity consumers in Lagos state pay higher rates, despite poor electricity supply.