The Nigerian Electricity Regulatory Commission (NERC) has imposed fines totaling N628 million on eight Electricity Distribution Companies (DisCos). The penalties address the DisCos’ failure to adhere to the stipulated monthly energy caps for unmetered customers during the period from July to September 2024.
Background on Energy Caps and Regulatory Measures
In 2020, NERC introduced the Order on Capping of Estimated Bills, aiming to ensure that estimated billing for unmetered customers aligns with the actual consumption patterns of metered customers on the same supply feeder. This initiative was designed to protect consumers from arbitrary and inflated billing practices.
Despite these regulations, a review of the DisCos’ billing practices for unmetered customers in 2023 revealed significant non-compliance. In response, NERC issued the Order on Non-Compliance with Capping of Estimated Bills, mandating corrective actions and imposing financial penalties to deter future violations.
Details of the Sanctions
The affected DisCos and their respective fines are as follows:
- Abuja Electricity Distribution Company (AEDC): N1.69 billion
- Eko Electricity Distribution Company (EKEDC): N1.41 billion
- Ikeja Electric (IKEDC): N1.41 billion
- Jos Electricity Distribution Company (JEDC): N1.338 billion
- Port Harcourt Electricity Distribution Company (PHEDC): N1.16 billion
- Benin Electricity Distribution Company (BEDC): N804 million
- Enugu Electricity Distribution Company (EEDC): N310 million
- Ibadan Electricity Distribution Company (IBEDC): N15 million
- Kaduna Electricity Distribution Company (KEDC): N115 million
- Kano Electricity Distribution Company (KEDCO): N20 million
- Yola Electricity Distribution Company (YEDC): N54 million
These fines represent 10% of the total over-billed amounts identified during the specified period.
Regulatory Directives and Consumer Redress
In addition to the financial penalties, NERC has mandated the following actions to ensure consumer protection and regulatory compliance:
- Credit Adjustments: DisCos are required to issue credit adjustments to all over-billed unmetered customers for the period between January and September 2023. These adjustments must be reflected in the March 2024 billing cycle.
- Public Disclosure: Each DisCo must publish the list of beneficiaries of these credit adjustments in two national daily newspapers and on their official websites by March 31, 2024.
- Revenue Deductions: NERC will deduct a total of N10.5 billion from the annual allowed revenues of the eleven DisCos during the next tariff review. This measure aims to deter future non-compliance with the approved energy caps.
Broader Implications and Government Subsidies
This enforcement action underscores the federal government’s commitment to consumer protection in the electricity sector. In a related development, the government projected an electricity subsidy of approximately N180.8 billion for September 2024. This subsidy is intended to support power consumers in Bands B to E, whose tariffs have remained unchanged since December 2022.
