The Nigerian Electricity Regulatory Commission (NERC) has directed the 11 electricity distribution companies (DisCos) to stop further collection of electricity bills under the estimated billing system.
The suspension order signed by the NERC Chairman, Mr. James Momoh and Commissioner, Legal, Licensing and Compliance, Mr. Dafe Akpeneye, takes effect from February 20. It has already been circulated to all the DisCos concerned.
The directive titled ‘‘Order on the Capping of Estimated Bills in the Nigerian Electricity Supply Industry (NESI),” repeals the methodology for estimated billing regulations 2012, and shall cease to have effect on the issuance of a new order on the same subject matter by NERC.
The NERC directed further that based on the above, the estimated billing methodology is hereby repealed and shall cease to have effect as a basis for computing the consumption of unmetered customers in NESI.
‘‘Discos shall ensure that all customers on tariff class A1 in their franchise areas are properly identified and metered by 30 April 2020. While all unmetered RS and C1 customers shall not be invoiced for the consumption of energy beyond the cap stipulated in schedule 1 of this order.
All R1 customers, who by definition consume no more than 50 kilo watt hour(kwhr) of energy per month, shall continue to be billed at N4 kwhr and a maximum of N200 per month unless otherwise amended by an order of the commission.
The NERC order instructed further that the energy cap prescribed by the commission shall only apply to R2 and C1 customers, adding that all other customers on higher tariff classes must be metered by DisCos no later than April 30, 2020, failing which these customers are not liable to pay any estimated bill issues by DisCos
Any customer on such higher tariff classes not metered beyond April 30, 2020 shall remain connected to supply without further payment to the DisCo, until a meter is installed on the premises under the framework of Meter Asset Provider (MAP) regulations or any other financing arrangement approved by the commission.
Customers whose current estimated bills are lower than the prescribed energy cap shall remain so without any upward adjustment until a meter is installed by the Disco under the MAP regulation or any other initiative approved by the commission.
However, it warned that any customer that rejects the installation of a meter on their premises by a Disco shall not be entitled to supply and must be disconnected by the Disco, and shall only be reconnected to the network with the installation of a meter.
And ahead of the April target for the likely introduction of new electricity tariffs, NERC said it will begin a nationwide consultations with stakeholders.
According to a notice by Momoh, the consultations will hold from February 25 to March 11 in 12 locations nationwide.
He said the NERC has received Extraordinary Tariff Review Applications from the eleven (11) Electricity Distribution Companies (DisCos) and the Transmission Company of Nigeria Plc (TCN).
He said the consultations will hold as follows: Eko Electricity DisCo (February 25); Kaduna (February 25); Abuja (February 26); Ikeja (February 26); and Ibadan, (February 28).
Meanwhile,the electricity generation companies (GenCos) have raised the alarm over the Federal government’s allaged failure to make plans on how to fund the N1.7 trillion shortfall in either the annual budget or in the 2015 Multi Year Tariff Order (MYTO) and blamed the Nigerian Electricity Regulatory Commission (NERC) for the funding gap.
Electricity distribution companies (Discos) also said they had offered to return their licences to the Federal government on two different occasions but the government rejected the offers.
The GenCos, under the umbrella of Association of Power Generation Companies (APGC), the Executive Director, Mrs. Joy Ogaji, urged the Federal government to mention its funding initiative for the shortfall.
The spokesperson of the GenCos said: “Generation companies have raised concerns regarding the tariff review, scheduled to be effective on the 1st of April, 2020. The Gencos’ concerns relate to the fact that NERC has not captured all the ‘changes’ in the relevant macroeconomic variables and available generation capacity in updating the operating MYTO-2015 in line with the provisions of the MYTO Methodology.
“The seeming gaps are shown through the four parameters considered in the minor review namely: inflation, interest rates, exchange rates and generation capacity as it affects or impacts our business.
“Dealing with market shortfall
holistically, we are concerned about the financing of the shortfalls, given
that there is no provision in the 2019 or 2020 budget. What is the PSRP
financing initiative?
“What is not clear is who will take charge of the financing plan. Do these
plans and facilities even exist? If so, what are the terms under which they
were created, if not in existence, right now, who is working to create them and
when would they be ready?”
Ogaji urged the NERC to explain how it arrived at the MYTO review that refused
to capture the shortfalls in the sector.
She was worried about the inequitable manner of the remittances requirements of
the review tariff order.
According to her, whereas the tariff
review makes provision for Gencos to receive 36 per cent of their revenue
requirement, the Discos are to receive 100 per cent of theirs.
She also asked the commission to address the issue of previous failed reviews
and state how to make a difference in the current review.
Meanwhile, the Discos have said they had offered to return their licences to
the federal government on two different occasions.
The Executive Director of Research and Advocacy of the Association of Nigerian Electricity Distributors (ANED), Mr. Sunday Oduntan, reportedly that the Federal government refused the offer on both occasions.
“We believe that as long as the government or regulator do the right thing that is consistent with the wordings and tenets of the agreement signed with the private investors, they are free to take any action as long as the rule of law is observed.
“As far as we are concerned, we have taken our licences to them before, two times, one during the tenure of Jonathan. We said thank you for selling to us; take we are no more interested. It is called force majeure in law. Give us our money back. They said no; we are not taking it from you. They gave it back to us that we should keep on running it.
“During Buhari’s time, we said we are no more interested. They said no. For us to have filed force majeure tells you we are not a desperate set of people. All their concern is to be able to recover their costs. What we all want is electricity.”