Tariff Hike: DisCos reject NERC directive on estimated billing

Less than three weeks to the implementation of the 50 percent hike in electricity tariff, indications have emerged that Electricity Distribution Companies, DisCos, have rejected the directives of the Nigerian Electricity Regulatory Commission, NERC, pegging estimated billings.

The directive stated in part: “DisCos shall ensure that all customers on tariff Class A1 (schools, churches and mosques) are properly identified and metered by April 30, 2020. Also, R2 (users above 50kwhr) single phase customers now have energy cap of 78kwhr per month and a tariff of N24 kwhr.

“The maximum such a customer will be billed is N1, 872 per month. This billing is capped during the transitional period till they are metered but the Commission noted that actual amount shall vary in the event of any tariff review affecting such customer class.

“Residents that consume less than 50kwh will be billed at N4 per kwhr and a maximum of N200 monthly.”

Speaking at a session of the three-day customers consultation meeting held at Surulere, Festac and Lekki areas of Lagos, tagged: ‘Stakeholders Meeting on Extraordinary Tariff Review, Applications and Decommissioning of Unistar Meters’, Chief Legal Officer, Eko Electricity Distribution Company, EKEDC, Wola Joseph, said, “Many people are saying that estimated bills have been cancelled and that is very incorrect. What is correct is that an order has been issued and we are expected to provide what each class of customers is expected to pay.

“However, in looking at that order, we realise that there were major errors made by NERC in computing the figures and we are currently applying to the regulators to look at the figures they have given because as it is we cannot work with them.”

The order on estimated billing came along with the approval for the tariff hike.

Meanwhile, the management of the Eko Electricity Distribution Company, EKEDC, yesterday, warned that low level of liquidity in the power sector remains a threat to delivery of electricity services to consumers.

Liquidity in the power sector refers to the state of cash flow in the industry where the operators claim they are cash-strapped due to huge debts owned by consumers, especially the government.

On the other hand, the consumers may be getting set for a showdown with the Electricity Distribution Companies, DisCos, insisting that they would not corporate on the new tariff regime if the DisCos did not step up their services and also deliver pre-paid meters to them.

Speaking on the proposed tariff hike set to commence April 1, 2020, Head, Power Procurement Regulatory (PPR), EKEDC, Mr. Nosa Igbenedion, stated: “This liquidity crisis is a major threat to the power sector. The revenue shortfalls adversely affect the ability of DISCOs to make capital investments in metering, network expansion, equipment rehabilitation and replacement that are critical for service delivery.”

He therefore justified the tariff hike as a solution to the liquidity crunch.

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He stated: “The challenge in the power sector is such that there is very low liquidity, and lack of liquidity is creating problems around efficiency because if we are not able to increase price, I don’t think we can get the required revenue funding from lenders.”

“We don’t favour estimated bills, they don’t help us. As a matter of fact most of the studies show that we end up with less revenue from estimated bills. So it is important we get meters to everybody.”

However, customers argued that the tariff hike was not justified in view of poor services rendered as well as low metering.    They called for massive metering in place of current estimated billing system which is not commensurate service provided.

A customer from Igbo-efon estate in Lekki, Lagos who identified himself as Mr. Balogun, lamented that current planned tariff hike was extortive and unjustified. He stated: “We cannot accept the increase because the services across board are bad and not fair.

“We cannot be paying for darkness and inefficiencies of the DISCOs.

There are bad transformers, inefficient cables and unavailable poles. Till now, communities still pay for transformers as DISCOs often claim unavailability of transformers owing to foreign exchange and liquidity squeeze.”

Another resident at Agbara, who identified himself as Mr. Rufai Abubakka, called for redress on issues ranging from estimated bills and lack of transformers from the distribution companies.

He stated: “We are constantly been charged for darkness without adequate and right calculations. Nigerians are not worried about tariff hike rather ‘crazy bills’. The methodology for calculating these crazy bills is unbelievable.”



Source: Vanguard