Energy
It would appear that the only time the Nigerian Electricity Regulatory Commission is in the news, is when the body is either increasing electricity tariffs or raising meter prices. Beyond this incessant hike in prices, which comes with additional burden on already beleaguered Nigerians, Emmanuel Addeh writes that the industry regulator must protect the ordinary Nigerian, who most times, is at the receiving end
The Nigerian Electricity Regulatory Commission (NERC) describes itself as an independent body, established by the Electric Power Sector Reform Act of 2005 to undertake technical and economic regulation of the Nigerian Electricity Supply Industry (NESI).
Aside setting “cost reflective industry tariffs”, NERC is saddled with the responsibility of licensing operators, determining operating codes and standards as well as “establishing customer rights and obligations.”
However, the belief by many Nigerians is that the “customer rights” portion of that role has always been the missing link. While NERC’s capacity to enforce the rules against industry operators remains in doubt, its activities have always been perceived to be mostly in favour of the businessmen, rather than pursuing fairness for customers.
On its website, NERC, in trying to beat its own chest vis-à-vis its “achievements” notes that it “has issued licences for electricity generation, transmission and distribution, as well as the development of industry codes and standards, market rules and a multi-year tariff order,” yet nowhere was the customer, who ordinarily should be the centre of its operations, mentioned.
But then again, many say it is understandable. The higher the tariff collected, the higher NERC’s cut of the dough. The regulator currently collects 1.5 per cent of market revenue as regulatory charge vide the market operator.
Consumer Rights Routinely Ignored
The NERC is empowered by the Electric Power Sector Reform (EPSR) Act, 2005 to ensure an efficiently managed electricity supply industry that meets the yearnings of Nigerians for stable, adequate and safe electricity supply.
For instance, as part of its laws, NERC says all new electricity connections must be done strictly based on metering before connection. “That is, no new customer should be connected by a Disco without a meter first being installed at the premises.”
In addition, part of the organisation’s guidelines says that all customers have a right to electricity supply in a “safe and reliable manner” and that “all customers have a right to a “properly installed and functional meter”.
Furthermore, the rules say that: “All customers have a right to be properly informed and educated on the electricity service and that all customers have a right to transparent electricity billing.”
It notes that: “It is the customer’s right to be notified in writing ahead of disconnection of electricity service by the Disco serving the customer in line with NERC’s guidelines”, pointing out that “customers have a right to refund when over-billed.
In the same vein, NERC affirms that :“All customers have a right to file complaints and to the prompt investigation of complaints”, as “It is the customer’s right to contest any electricity bill.”
“Any unmetered customer who is disputing his or her estimated bill has the right not to pay the disputed bill, but pay only the last undisputed bill as the contested bill go through the dispute resolution process of NERC.
Yet, many Nigerians continue to be ripped off by the Discos, with electricity supply worse off following reduction in number of hours, yet customers continue to pay the higher price band without being moved to a lower band.
Another Meter Price Hike
On the 15th of November this year, the federal government through NERC, again increased the price Nigerians pay for the single phase and three-phase meters by between 30.6 per cent and 32.3 per cent respectively.
Making the announcement in a circular signed by the commission’s Chairman, Sanusi Garba, dated November 11, 2021, NERC stated that the new prices were exclusive of Value Added Tax (VAT).
The commission’s order which hiked the single-phase meter from the current cost of N44,896.17 to a revised price of N58,661.69 and the three-phase meter from N82,855.19 to a revised rate of N109,684.36 was addressed to managing directors of all Discos and all Meter Asset Providers (MAP).
By implication, it meant that Nigerians would pay N13,766 and N26,829 more to get the 11 Discos to provide them with the single phase and three-phase meters, according to the new order.
To make matters worse, NERC added that the prices were not inclusive of the 7.5 percent VAT which the Discos and other meter providers are expected to include at the point of sale.
When the mandatory VAT is calculated along with the new prices, a single meter phase will now have N4,400 included to sell at N63,061.69 while a three phase meter will have additional N8,227 for VAT to sell for N117,911.36.
Cumulatively, the addition of the N18,166 and N35,227 plus VAT increases come ahead of the commencement of the phase 1 of the federal government’s National Mass Metering Programme (NMMP) and the MAP, the current metering schemes in operation in the country.
Before last week’s increase, Nigerians had been confronted with several hikes in the prices of meters, with one of them taking place in June 2020 when the industry regulator increased the price by about 14 per cent. Again, it increased in July of the same year, when the new 7.5 per cent VAT was introduced and on the back of falling naira value.
The pricing template indicated that in April 2020, a single phase meter sold for N39,991.50 while a three phase meter went for N67,055.85. But in June 2020, the single phase meter rose to N44,896.17 while the three phase meter sold for N82,855.19.
Statistics show that the number of unmetered customers across Nigeria has continued to rise. In 2016, a metering status report from NERC showed that about 3 million of the registered accounts of customers were unmetered.
In 2017, the number grew as NERC reported that over 4 million unmetered customers were without meters, while in 2019 a NERC document showed that over 5 million Nigerians were unmetered. In 2021, the number has hit about 8 million.
Clarification and More Confusion
A few days later, NERC, in a release said that its announcement had been misconstrued by the public, without really saying anything different from the initial release.
Following the backlash which followed the hike, the regulator in a public notice stated that the 4 million meters to be provided under the National Mass Metering Programme (NMMP) would not be paid for ‘directly’ by the customers.
It said, “The NMMP designed to provide all consumers of electricity with meters is a policy intervention of the federal government supported by CBN concessionary loans to distribution companies.
“This laudable initiative is still very much on course. A total of over 900,000 units of meters have so far been installed under the take-off phase of the scheme without any payment by benefitting consumers.
“While this doesn’t cover many of the unmetered customers, we are pleased to inform electricity consumers that the next phase under which about 4 million units of meters would be procured from local meter manufacturers has commenced.
Another Tariff Increase in the Offing
Yet, Nigerians may have to prepare for another increase next month, despite dwindling supply in several parts of the country, if this week’s signal by a top member of the commission is anything to go by.
Deputy General Manager, Consumer Affairs, NERC, Shittu Shuaibu ,speaking during a live radio programme monitored in Abuja, was quoted as listing the upcoming actions as the Extraordinary Review of Transmission Company of Nigeria’s (TCN) Loss Factor (TLF) in the MYTO and the processes for the December 2021 review of MYTO 2021.
He said the December 2021 MYTO review was to consider changes in relevant macroeconomic indices, generation capacity and capital expenditure required for evacuation and distribution of the available generation capacity in compliance with extant rules.
The commission explained that pursuant to the provisions of the Electric Power Sector Reform Act, the NERC adopted the MYTO methodology in setting out the basis and procedures for reviewing electricity tariffs in Nigeria.
Youth Coalition Opposes Meter Price Increase
In a reaction to the price increase, the Coalition of South-east Youth Leaders (COSEYL) faulted the move, arguing that it will cause more hardship in the country.
President-General of COSEYL, Goodluck Ibem, said while electricity consumers were already finding it difficult to pay the old electricity meter price of N44.896.17 for single phase meter and N82.855.19 for three-phase meter.
While advocating a price reduction to N30,896.17 for single phase meter and N55,855.19 for three-phase meter, he argued that “most essential goods and services are already above the reach of the common man.”
Despite over 300% Increase in Tariff, No Marked Improvement
In the last four years, electricity tariffs have increased by more than 300 per cent. Yet , Nigerians have not enjoyed commensurate quality of power supply.
For instance, between 2015 and 2019, the average electricity tariff climbed from N12 kWh to about N32kWh and had since climbed by about 30 per cent in 2020 to about N49 for some bands.
But despite the increases in tariffs, Nigeria’s power generation has continued to hover between a paltry 3,500 megawatts and 4,500MW since the sector was officially privatised in November 2013.
With Weak Regulator, FCCPC Steps In
But power consumers have now turned to the Federal Competition and Consumer Protection Commission (FCCPC) for salvation, having apparently waited in vain for the industry regulator to act.
From time to time, the consumer protection organisation has taken up Discos for ripping off consumers, declaring for instance that arbitrary billing and group disconnection of electricity consumers without consideration for those paying their bills constitute a gross abuse of consumer rights.
In one of those meetings, the Director General of the Council, Babatunde Irukera, told the Discos that “there is no excuse for how consumers are treated”.
He pointed out that the key complaints received by the body are arbitrary, unsupported and unreasonable billing; people not being treated with dignity, the complaint resolution process is either lacking or unclear and there’s no respect for people.
If the sector must make marked progress, industry watchers believe that NERC must live up to its responsibility and sanction the operators when there are apparent breaches of the rights of Nigerians.
