Tariff hike: Compel DisCos to stop estimated electricity billing, NASS orders NERC

National Assembly (NASS) in separate resolutions has ordered the Nigerian Electricity Regulatory Commission (NERC) to compel electricity distribution companies (DisCos) in the country to stop the arbitrary billing of consumers with immediate effect.

The House of Representatives resolution followed the adoption of a motion by Hon. Afuape Moruf calling NERC to address challenges confronting electricity consumers.

The House also urged the NERC to sanction the DISCOs for the abysmal electricity supply to consumers, and work out modalities to compensate communities, individuals and other private and public entities for their investments in the distribution network.

The House also mandated its Committee on Power (when constituted) to interface with NERC and DisCos to address issues impeding quality services delivery to consumers.

While leading the debate on the motion, Hon. Moruf expressed dismay that the 11 DISCOs across the country have continued to render abysmal poor services to consumers, contrary to the Electricity Act, 2023.

He stated that it was a more worrisome that consumers pay DisCos for meters, cables and transformers, yet they are disconnected at will by the former.

“The Distribution Companies raked in a whopping N247.33 billion in the first quarter of 2023 as against N232.32 billion generated in fourth quarter of 2022, representing a rise by 20.81% compared to N204.74 billion generated first Quarter of 2022 (year-on-year consideration);Whereas, electricity supply declined from 5,956 (Gwh) in first quarter of 2022 to 5,852 (Gwh) first quarter of 2023 (year-on-year consideration), despite the increase in earnings.

“The Distribution Companies have demonstrated unfaithfulness toward the social contract with Nigerians, as enshrined and enhanced by the transitional effect of the Electric Power Reform Act, 2005 to the Electricity Act, 2023.

 “NERC has watched helplessly while communities, individuals, and corporate organisations assumed the responsibilities of providing electricity transmission facilities (meters, cables and transformers) where they are either not available or repaired, where the same are faulty; Whereas, the Commission can act within the ambit of its own created Service Charter that outlines consumer rights, obligations, expected service levels, and redresses applicable to them.

“While NERC watches the DisCos abdicate their responsibilities to communities, individuals, corporate bodies, and public institutions, no compensation mechanism has been evolved to ensure either an outright refund of these third party investments in the distribution network or a possible conversion of same to electricity credits for the use of these investors,” he said.

In a ruling, the Speaker, Tajudeen Abbas mandated the Committee on Power (when constituted) to interface with the NERC and the distribution companies (DisCos), to work and resolve limitations to provide excellent service delivery to Nigerians.

Meanwhile, rising from its Tuesday plenary, the senate in its resolutions urged NERC to explore alternative measures to address the financial challenges faced by DisCos such as improving operational efficiency, reducing technical and commercial losses, and enhancing revenue collection mechanisms.

It also asked DisCos to henceforth discontinue estimated billing and make available to all electricity consumers prepaid meters at affordable prices.

Thereafter, the Senate mandated its Committee on Power, when constituted, to engage with the Federal Ministry of Power, the NERC and other stakeholders to find lasting solutions to the challenges facing the electricity sector, including the need for comprehensive reforms.

The Senate further called on the Federal Government to intervene and halt the proposed increase in electricity tariff by the distribution companies (DisCos), just as they urged the NERC to decentralize the proposed engagement with stakeholders scheduled for Abuja, to the six geo-political zones of the federation for effective participation by all.

The Senate’s resolutions were sequel to a motion, titled: “Need to halt the proposed increase in electricity tariff by 11 successor electricity distribution companies, DisCos” sponsored by Senator Yunus Akintunde and two others.

Leading debate on the motion, Senator Akintunde, noted that the 11 successor DisCos have applied for rate review with the NERC, saying that “the request for rate review is premised on the need to incorporate in macro-economic parameters and other factors affecting the quality of service, operations and sustainability of the companies.”

Senator Akintunde informed that the commission, in line with its mandate, requested the general public for comments on the rate review applications by the distribution licenses, while advising interested stakeholders to review and consider the excerpts of the applications filed with the commission by the respective licenses.

The lawmaker further observed that NERC, according to the powers conferred on it by Electricity Act 2023, is empowered to conduct a rate case hearing on the applications before making a ruling, adding that the commission had through its official website published and set July 20, 2023 deadline for comments by stakeholders.

Senator Akintunde expressed concern that “the proposed increase will significantly impact the affordability of electricity for the average Nigerian, further exacerbating the financial burdens faced by households and businesses.”

He added that it would impede industrial growth, job creation and economic development while it would also “have adverse effects on the nation’s drive towards sustainable development and poverty reduction.”

According to him, the time frame of less than one week provided by the NERC for comments from all relevant stakeholders was too small for any meaningful engagement.

“It is essential to address the issues of inadequate power supply, metering and quality of service provided by the DisCos.  Customers should not bear the brunt of inefficiencies in the power sector,” Akintunde said.