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Outrageous billing on the rise

One of the objectives of the second phase of the Multi Year Tariff Order, MYTO 2, is to reduce the incidence of estimated billing to the minimum tolerance; however, experience has shown that rather than decreasing, outrageous billing had since increased.

Customers of the electricity distribution companies unbundled from the Power Holding Company of Nigeria, PHCN, have continued to groan under the weight of the crazy billing from the utility provider, even as supply continues to fall on daily basis.

Customers mostly affected are those who don’t use prepaid meters and even worse among those without meters, notably those in Residential One and Two (R1&2) categories of MYTO 2 who, according to the Electricity Power Sector Reform Act, are not only to pay low tariff but also to be protected from undue high tariff to enable them have access to electricity.


Many of the customers spoken to told Sweetcrude that their monthly bills were now as high as between N17,000 and N30,000 for households of two and three bedroom flats, who don’t even use air-conditioners in their homes.

The customers recalled that the crazy billings got worse from around September. One of them who identified himself as Femi Makinde, in Abule Egba area of Lagos, disclosed that his bills skyrocketed from N2.500, pre-MYTO 2 to N13,000 in October, over N18,000 and to over N26,000 in November. Another consumer in Ikeja Mr. Yemi Ajakaiye said his bill jumped from N15,000 in October to N30,000 in November. “Somethingt is definitely wrong somewhere, since I am not running a business centre,” he maintained.

The implication of this outrageous billing is that it might make customers lose confidence and trust in the power sector reform and promises of the government in making power affordable by low income earners, he added.

Some of the officials of the Buisness Units that spoke in confidence to The Nation said the marketers create a lot of problems to them by not actually reading the meters. They noted that even if customers have faulty meters or their meters inaccessible, they (marketers) should endeavour and properly determine the consumption level of a customer before estimating his bill.

“When we see customers mill around here, we don’t feel good because what we preach and expect to attain is commendable service delivery and customer satisfaction but we are working on resolving this issue of crazy billing but you know this cannot be achieved overnight,” they said.

At the last Quarterly Power Summit organised by the Ministry of Power in Lagos, the Chief Executive Officer, Benin Electricity Distribution Company, Mr. Effiong Umoren, speaking on the issue of tariff reiterated the need to get tariff right in order to get the privatisation and reform aspirations right.

In his paper titled, “Market performance under the implementation of MYTO 2, Prospects and Challenges: Operator’s perspectives,” he emphasized the need for the current tariff structure to be slightly adjusted.

He said: “Unless we are banking on periodical government bailouts, the tariff structure is one single component in the power equation that decides the survival or otherwise of the electricity supply chain, we must get it right.”

He identified major features of MYTO 2 to include increase in energy and fixed charges across the various tariff class, abolished payment for meters and connection fees by customers, abolished meter maintenance fees effective from December 2011, abolished payment of statutory charges for maximum demand (MD) customers, inspection and survey fees, testing fees, metering and commissioning fees, reduced tariff classes from 19 to 14, the merger of all the low energy users in each class: R, C, D, and A and collapse of all charges in each category into only two components: Fixed charge and Energy charge and removal of KVA component from MD bills

He cited the major benefits of MYTO 2 as discouraging fraudulent classification of customers from R3 to R2 by under declaration of load demand and reduction in energy theft. He added that due to the free meter programme, customers previously stealing energy were now interested in the free meters and regularisation of their supply statuses.

On the challenges of MYTO 2, he listed the unrealistically high fixed charge of N139,466 for a wide segment of D2 customers: small scale industrial customer, saw millers, aluminum and steel product makers, confectionary manufacturers adding that on high fixed charge of N25,018 on R3, as part of them. “We have some instances where fixed charge is up to three times the energy charge; particularly on “seasonal and weekend” residential houses.

He argued that the inclusion of kva as a component of tariff encourages more efficient machinery, thus improving system voltage profile, adding that its abolition in MYTO 2 will increase ‘power factor indiscipline’, thus putting avoidable burden on terminal equipments. “Power factor efficiency requires additional investment on the part of customer. There is no more incentive for this investment,” he added.


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