NERC Fines 11 DisCos N10.5bn For Over-billing Unmetered Customers

The Nigeria Electricity Regulatory Commission (NERC) has sanctioned the 11 electricity distribution companies (DisCos) in the country with a N10.5billion fine over non-compliance with capping of estimated bills for unmetered customers.

According to NERC, in a statement dated February 8, 2024, the deduction would be made from the annual allowed revenues of the 11 DisCos during the next tariff review, to deter future non-compliance with the energy caps approved by the Commission.

NERC disclosed this in the statement via its official X handle on Friday.

The commission also asked DisCos to issue credit adjustments to all overbilled unmetered customers from January to September 2023 by the March 2024 billing cycle as part of the sanction.

“DisCos have been directed to publish the list of credit adjustment beneficiaries in two national dailies and on their website no later than March 31, 2024,” the regulatory commission stated.

As of the recent data by the Commission, unmetered customers in Nigeria stand at 6.68 million out of the 12 million people that registered to get into the system in the third quarter of 2023.

However, according to NERC, a review of the DisCos billing unmetered customers for 2023 has revealed non-compliance with the energy caps issued by the Commission.

In a bid to safeguard unmetered customers from arbitrary billing by DisCos, the Commission, pursuant to Section 34(1)(d) of the Electricity Act 2023(“EA 2023”), issued the Order Non-Compliance with Capping of Estimated Bills with Order No: NERC/2024/004-014.

“The public may recall that in 2020, the Commission issued the Order on Capping of Estimated Bills (Order No: NERC/197/2020) and subsequently issued monthly energy caps which aimed align the estimated bills for unmetered customers with the measured consumption of metered customers on the same supply feeder.

“The Commission reaffirms its commitment to regulatory compliance and consumer protection within the Nigerian Electricity Supply Industry,” the statement read.

10% of the total over-billing to be deducted from their OPEX.

As per the analysis, Abuja Electricity Distribution Company (AEDC) overly charged unmetered customers an astonishing ₦17.8 billion. Similarly, Eko Distribution Company (EKEDC) surpassed its usual limit by a staggering ₦13.137 billion. In the case of Port Harcourt Electricity Distribution Company (PHEDC), the excess amounted to ₦14.187 billion, while Kaduna Electric overcharged unmetered customers by ₦1.145 billion. Lastly, unmetered customers of Yola Disco were unfairly billed ₦541.88 million. Kano electricity Plc reportedly overcharged its unmetered customers a staggering amount of ₦196.9 million.

Alongside imposing a 10 percent penalty on the utilities, NERC instructed the Discos to fully reimburse the customers and ensure their future compliance. Just like other power distribution companies, Eko Disco has been cautioned by the commission that in order to prevent future non-compliance, a deduction of ₦1,413,766,176, representing 10 percent of the total over-billing from January to September 2023, will be added to its operational expenses (OPEX) over a 12-month period. This deduction will be implemented during the upcoming tariff review.

Credit adjustments required for over-billed consumers.

Recall that in 2020, the commission made a noteworthy move by issuing an order (Order No: NERC/197/2020) to put a limit on estimated bills. Following this, they also introduced monthly energy caps with the intention of equating the estimated bills for customers without meters to the actual energy usage of customers who have meters on the same supply feeder. NERC noted that the Discos’ billing of unmetered customers for the year 2023 has violated the monthly energy caps set forth by the commission, as mentioned in their official statement.

To ensure that customers without electricity meters are protected from unfair charges imposed by Discos, the commission issued an order (No: NERC/2024/004-014) in accordance with Section 34(1)(d) of the Electricity Act 2023 (EA), which addresses non-compliance with the limitation on estimated bills. According to the official statement, in the upcoming billing cycle of March 2024, Discos are required to give credit adjustments to all their customers who were over-billed and do not have meters, covering the time span from January to September 2023.