Wonodi: Discos to Pay Full Invoices with New Tariffs

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MD of the Nigerian Bulk Electricity Trading (NBET), Mr. Rumundaka Wonodi

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The Managing Director of the Nigerian Bulk Electricity Trading (NBET) Plc, Mr. Rumundaka Wonodi has said that with the new tariffs that took effect from February 1, 2016, the electricity distribution companies in the country would henecforth be able to pay their full invoices.

Wonodi told THISDAY recently that from March, the remittance of the distribution companies to the other members of the value chain would improve significantly.

He stated that inadequate metering, non-payment by consumers and poor collection have made it difficult for the discos to meet their obligations to the other members of the value chain.

“They (discos) are not paying their full invoices…we hope that with this new adjustment in tariffs, they should be able to pay their bills. I believe that all these are being addressed by this whole idea of this new tariff,” he said.

Under the new tariff that took off on February 1, all electricity consumers – residential and commercial – would no longer pay fixed charges, so their total bills would reflect the electricity they consume and might be reduced when they conserve electricity.

Former Chairman of Nigerian Electricity Regulatory Commission (NERC), Dr. Sam Amadi had said the objective of the new tariff was to enable prudent consumers to save money on electricity bills as they can now control their consumption and not pay the monthly fixed charges.

Giving some insight into the new tariff structure, NERC disclosed that residential consumers classified as R2 under the Abuja Disco coverage area, would no longer pay N702 as fixed charge every month but their energy charge would increase by N9.60 per kilowatt/hour (Kwh).

Residential consumers under the same category covered by Eko and Ikeja Discos will no longer pay the N750 fixed charge but will see their tariffs increase by N10 and N8 per Kwh increases respectively.

Similarly, N800 and N750 fixed charges would be taken away from R2 consumers covered by Kaduna and Benin Discos respectively, but they will pay N11.05 and N9.26 per Kwh.

NERC also explained that the new tariffs would be reasonable for commercial consumers in the C2 category which paid N17,010 and N22,141 as fixed charges to Ibadan and Enugu Discos respectively. C2 consumers instead will see their energy charges increased by N12.08 and N13.35 per Kwh respectively.

NERC had added that the new regime came with key performance benchmarks such as a renewed commitment by the Discos to rapidly improve the quantity and quality of electricity supply to consumers.

NERC noted that the commitment was included in the service level agreements they signed as part of the performance level agreements executed during the sale of the assets by the federal government.

According to the commission, the tariff order also encourages the Discos to develop new sources of supply within their franchise to increase the quantity and quality of supply to target customers on a willing buyer-willing seller basis.

It said it initiated these measures to improve electricity supply across Nigeria and ensure that the Discos work to increase investment that would ensure stability in power supply.

NERC equally said all Discos would have to meter all its customers, as the metering policy it signed into law would be strictly enforced.

“For those willing electricity customers who paid for meters under the Cash Advance Payment Metering Initiative (CAPMI) but are yet to be metered within the allowable 60 days, they would no longer be billed by the electricity distribution companies under the new tariff regime.

“The Discos will not disconnect them. There is zero tolerance for overbilling of customers. An unmetered customer who is disputing his estimated bill would not be expected to pay the disputed bill. He would pay his last undisputed bill as the contested bill goes through the dispute resolution process. This is a departure from the old practice which prescribed that customers should first settle the bill while the dispute resolution was in process,” added Amadi.

He explained further: “The new tariff regime is the result of a transparent, rigorous and credible rate review process. The tariffs will lead to greater reliability in the provision of electricity.

“More people will progressively have access to the grid, more meters will be deployed and the need for self-generation would be gradually reduced.”

He also stated that NERC would not allow Discos to connect new customers without first metering them, adding that the measure would help close the wide metering gap of over 50 per cent and reduce high incidence of collection losses in the market.