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NERC Replies Senate’s Query On Fixed Charge And Estimated Billing

In the spirit of transparency and accountability in the monitoring of the electricity market, the Nigerian Electricity Regulatory Commission (NERC) has responded to the query issued it by the Senate on Fixed Charge, Estimated Billing and Sundry issues.

In an address to newsmen; at the headquarter of the Commission,  Chairman/Chief Executive of NERC, Dr Sam Amadi informed that the Commission received seven queries from Senate, which the Commission has respectfully responded to.

The queries touched on the customer complaints by electricity consumers, the fixed charge, bulk metering of customers and estimated billing.

The Senate query also centred on payment for electricity meters, regulations and investments in electricity networks in Nigeria.

Amadi who expressed believe in the importance of the oversight function of the National Assembly, pointed out that the Commission has maintained its place as the first public agency in Nigeria to openly pledge to the Freedom of Information Law.
‘’ This is why we continue to avail the National Assembly of all necessary co-operation in its oversight functions’’.

On  customer complaints, the Commission helmsman affirms NERC’s understanding of the place of customers in the Nigeria Electricity Supply Industry as the Commission performs its function of encouraging distribution  companies on consumer protection adding that  ‘’The Regulation on Customer Complaints Handling Standards and Procedures covers that aspect’’ Amadi said.

He revealed that ‘’ this regulation stipulates that every distribution company should establish functional customers complaints units to receive and resolve all complaints from customers on electricity supply within their area of operation. A timeline of 15 days is specified for this’’.

He further revealed that the Commission monitors the complaints to distribution companies on a monthly basis.  This includes establishment of the NERC Forum Offices to make effective complaint management mechanism. Representations at the Forum comprise stakeholders from Manufacturing Association of Nigeria, Consumer Protection Council, Nigerian Society of Engineers and the Civil Society Organisations.

On the query for the abolition of fixed charge, NERC’s Chairman stated ‘’ Fixed Charge is not tied to consumption as such NERC cannot wake up in the morning and say, we have abolished this. We will always go through process and even before the intervention, we have commenced the process’’.

According to him, Senate’s concern is not far-fetched. ‘’ Senate is just worried that people are paying for what they did not consume’’ while he maintained that the fixed charge that consumers pay is not an illegal.

‘’The purpose of the fixed charge is to recover the capital and fixed cost of the various operators in the industry. Section 32 of the EPSR  Act 2005 mandates the Commission to approve a tariff that allows investors recover their prudent cost with reasonable return on the assets on a regular basis and recover their investments through the fixed charge paid by the consumers’’ Amadi stated.

He disclosed that fixed charge is a universal practice, thus abolishing it may impact negatively on the market participants who have invested a lot and are continuously making investments in the industry.

The  Commission  has asked the distribution companies to find a way to restructure the fixed charge such that no one would be made to pay fixed charge for electricity not consumed. ‘’ This remodelling of the fixed charge will be part of the on-going tariff review process being conducted by the distribution companies’’ Amadi said.

As for bulk metering of customers the Commission agrees with the Senate on the need to eliminate the practice, preferring that electricity customers should be metered individually and declared that customers have the right to reject community bulk metering. ‘’ Communities who are placed on bulk billing should reject it and insist on individual metering’’ Amadi declared.

Dr Amadi also revealed that the Commission has carried out extensive customer sensitization at both local and state levels in conjunction with the distribution companies and the consumer protection council. This is even as the distribution companies have been mandated to carry out sensitization programs as part of their tariff review exercise.

He informed that electricity consumers are not expected to make any other payment for electricity supply outside the monthly tariff   as approved by the Commission. There are however, a few exceptions where a customer may make payment for capital items and get refunded, with reference to payment for meters and capital items.

While the Commission renders its quarterly report periodically to the National Assembly, the regulation for investments in electricity networks was approved by the Commission to aid market participants to carry out network expansion projects and get compensated through the tariff.

Dr. Usman Abba Arabi – Head, Public Affairs Department
email: uabbaarabi@nercng.org
            mfaloseyi@nercng.org

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