NERC Mulls Reduction in Discos’ Disconnection Period to 10 Days

Emmanuel Addeh in Abuja

Nigerians may soon face more challenges in the supply of electricity to their homes as the Nigerian Electricity Regulatory Commission (NERC) is set reduce the legal period consumers are allowed to owe before disconnections from three months to 10 days.

In a document it titled, “Consultation Paper on Review of Customer Protection Regulations in the Nigerian Electricity Supply Industry”, the regulatory agency also said it was considering re-introducing service charge to be borne by the country’s electricity customers.

In the paper signed by the Chairman of NERC, Mr Sanusi Garba, obtained by THISDAY, the commision stated that it was desirous of reviewing the regulations to align them with the current market realities, ironically, in order to ensure the interests of customers are adequately protected.

However, it mentioned that the commission has also received proposals from the Discos on the amendments to some sections of the regulations in consideration of the current state of the industry.

NERC said the reviewed regulations would provide for the procedures to be undertaken by Discos in connecting new customers, disconnecting and re-connecting a customer in the event of default, safety issues or at the instance of the customer.

“Section 5, 1 (d) of the regulations provides for disconnection of supply to customer’s address when the customer has not paid the amount correctly billed for supply to that address by relevant date provided the period between the payment date and the date of disconnection is not less than three months.

“However, some stakeholders have raised concerns about the misalignment between the three months grace period and market settlement cycle. It has been argued that allowing customers to owe a utility for three months before disconnection affects the ability of Discos to meet their payment obligations which often contributes to higher illiquidity in the sector.

“In view of the aforementioned concern, section 5, 1 (d) of the regulations is proposed for amendment as follows: “A Disco may only disconnect supply to a customer’s address when the customer has not paid the amount correctly billed for that account by the relevant payment due date, provided the period between the payment date and the disconnection date is not less than 10 days after the payment due date”.

However, NERC stated that stakeholders are expected to comment on the proposed amendment especially on the appropriateness of the proposed 10 days grace period between the relevant payment due date and disconnection date.

On return of maintenance fees, the industry regulator said that electricity distributors have consistently argued that the removal of maintenance charge is not in line with global best practices and that the removal has put a strain on their ability meet their market obligation.

“The utilities consider the removal unfair because they are obligated to pay fixed capacity charge to generation companies. They further argue that maintenance charge is not only applicable to meter maintenance but applies to maintenance of all infrastructure provided by Discos, including the networks already provided for servicing customers,” NERC argued.

NERC added that the option may be to amend a section of the regulation to limit the payment of maintenance the charges to metered customers or be expunged completely.

The regulator also proposed that any Disco which disconnects a customer’s supply in violation of the regulation commits an offence and is liable upon conviction to pay the customer a penalty.

The commission said that it has observed that due to changes in macroeconomic indices such as inflation and foreign exchange rate since the issuance of the regulations in 2007, the value of the penalties have significantly eroded and may not constitute adequate deterrence to Discos to discourage unlawful disconnection.

“ The commission is therefore considering amendment to section 1,1 of the regulation as follows: “A Disco which disconnects a customer’s supply in violation of this regulations shall compensate the customer an equivalent of 100 per cent of the customer’s daily energy consumption or approved energy cap for every day the wrongful disconnection lasts”.

“ This shall be determined on the basis of the previous month’s bill or consumption” it stated.

Many Nigerian electricity customers have always accused NERC of always being on the side of the distribution companies, instead of protecting them from the unfair charges by the power distributors.

Related Articles