Discos Defy Court Order, Begin Implementation of New Electricity Tariffs

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Rozvodòa Varín

By Ejiofor Alike

Despite subsisting court order and the resolution of the Senate against the implementation of the new electricity tariffs across the country, the electricity distribution companies have commenced billing customers with the new rates, THISDAY has learnt.

THISDAY also gathered that the new tariffs, which took effect on February 1, 2016, have been reflected in March 2016 electricity bills.

The distribution companies, it was learnt, have started dispatching the bills containing the new rates to post-paid customers in their respective networks.

A top official of one of the Discos told THISDAY at the weekend that the implementation of the new tariffs was in line with the directive of the Nigerian Electricity Regulatory Commission (NERC).

When asked if the action of the Discos did not amount to contempt of court, in view of the subsisting court order against the increase in tariffs, the official who requested not to be named said: “NERC approved the increase and directed us (Discos) to implement and we implemented”.

“They (NERC) did not give us any contrary order not to implement. So, if there is a court order to that effect, it is a matter between NERC and the courts,” he added.

He confirmed that the new rates were in the March bills being sent out to post-paid customers, adding that the bills were actually meant for the energy consumed in February.
“The new tariff took effect from February 1 and that is what is being implemented in this month. What the customers are paying for was the power consumed in February. Most customers are still doing post-paid and that is why you see it reflected in their bills. Prepaid customers have since started paying the new rates,” he explained.

Also when reminded that the National Assembly had passed a resolution suspending the payment of the new rates, he said “by the time the distinguished law makers see the facts and figures, they will realise that suspending the tariff is like taking us 10 years backwards.”

In line with NERC’s directive, the Discos have also removed fixed charge from the new rates and retained only Value-Added Tax (VAT), thus bringing big relief to customers.
With the removal of the fixed charge, the difference between the new rate and the old rate for R1 customers, who constitute the largest customer population, has reduced significantly.

For instance, for Eko Electricity Distribution with an increase of 45 per cent, the old rate was N15.63 per kilowatt hour, while the new rate is N24 per kilowatt hour.

Under the old rate, a customer who consumed 300 kilowatt hour, assuming supply was relatively stable in that particular month, would pay N5,466.19 including VAT and fixed charge of N750.

However, under the new rate, R1 customer with the same energy consumption will pay a total of N7,236, representing an increase of N1,769.81.

But the major challenge facing this category of customers is estimated billing as the distribution companies do not read post-paid meters but slam customers with exorbitant estimated bills, which are the major cause of the public outrage against the new tariffs.

THISDAY however gathered that the impact of the new tariff regime will be felt mostly by manufacturers and other high demand (HD) customers, whose increment was very high.
After the take-off of the new tariffs, a Federal High Court sitting in Lagos, re-affirmed the order it made restraining NERC, from implementing the review, pending the hearing and final determination of the suit filed by a lawyer and rights’ activist, Toluwani Adebiyi, over the issue.

Trial judge, Justice Mohammed Idris had on February 29, while delivering a ruling on the preliminary objections of NERC against the filing of contempt charge by the plaintiff, said “let me warn that when the disciplinary jurisdiction of this court is properly invoked, anyone who is found to have ignored the order of the court will be dealt with severely”.

The Senate had also re-affirmed their order to NERC to halt the 45 per cent increase in tariffs, pending the outcome of public hearings to be conducted on the issue.