By Henry Umoru
ABUJA- CHAIRMAN/ Chief Executive Officer of Nigeria Electricity Regulatory Commission, NERC, Dr. Sam Amadi, has written to Senate President Bukola Saraki following the position of the Senate that the agency must abolish charges on electricity consumption by Nigerians, just as the Agency was ready for war with the lawmakers when the return from break, September.

Responding to the Query issued to his NERC by the senate on fixed charge, estimated billing and sundry issues, Amadi said that there was no going back on the charges on electricity consumption fixed by the Commission as that was a global practice, adding that it would not comply with the position of the Senate that it must be abolished.

According to him, the fixed charge that consumers pay in the Nigerian electricity market was not illegal or necessarily fraudulent, adding that fixed charges were part of the electricity markets across the world, but noted that the difference in Nigeria was that there was no good supply of electricity because of lack of generation capacity, adding that despite the poor power supply, consumers in the country were paying fixed charge for epileptic or no power supply so that Discos could recover the capital and fixed cost of the various operators in the industry.

Amadi, according to his response, a copy of which was obtained by Saturday Vanguard on Friday, however agreed with the Senate on position that bulk metering billing system be stopped on the need to eliminate the practice of bulk billing of residential customers, but would be replaced with the practice of individual metering and billing.

He however ordered the Abuja Electricity Distribution Company to pay N50m to its various consumers in the Federal Capital Territory as refund for overbilling them despite erratic power supply to their homes and business premises.

Amadi who xplained that his agency monitors all complaints reported to the Discos on monthly basis and carry out analysis on them, said, “The Commission has recently penalised Abuja Electricity Distribution Company for overbilling its customers and ordered it to refund the over billed amount and apologise to the customers for the wrongful estimation.

“Abuja Electricity Distribution Company has refunded about 32,000 customers so affected. The refund has ranged between 5,000and 15,000 per customer, adding up to over N50m.”

It would be recalled that the Senate had at its plenary session August 11, asked NERC to immediately abolish fixed charges on electricity consumption by Nigerians, just as it plans to constitute a Committee that would carry out a comprehensive overview of unfolding issues around the charges.

According to the Senate, NERC must account for all the money that have been so far collected on fixed charges across the country.

The Senate also asked the NERC to as a matter of urgency, discontinue with the practice of compulsory bulk metering and marketing in the villages and communities in the rural areas of the country against the backdrop that a consumer should have the right to either decide to be part of bulk metering scheme or not.

The Senate also directed the NERC to have a regulation that would mandate the Electricity Distribution Companies, DISCOs to discontinue the practice of making consumers pay for meters, ‎poles and transformers which by law were property of the DISCOs, adding that where the consumers provide those items, they should give notice of the provision to the DISCOs and should be entitled to recover their expenses from subsequent consumption of electricity.

The resolutions were sequel to a motion by Senator Sam Egwu, PDP, Ebonyi North) titled Unfair Trade Practices of Electicity Distribution Companies (DISCOs) in Nigeria. It was co-sponsored by Sen. David Umaru (Niger East).

In the letter, the NERC who noted that the commission established the forum office made up of representatives of important stakeholders like the ManufacturersAssociation of Nigeria, the Consumer Protection Council, the Nigerian Society of Engineers and representative of local Civil SocietyOrganization, stressed that the members elected their own chairman and carry out public hearing of complaints from consumers.

According to Amadi, every Disco had been mandated to establish functional Customer Complaints Units to receive and resolve all complaints from customers on electricity supply within its area of operation, adding that a time line of 15 days had been specified in the regulation for the resolution of complaints by the electricity customer after which an appeal could be lodged at the Forum Office.

He said, “The Forum Office represents the next level that the electricity customers can seek redress from the non-performance of Discos in resolving their complaints.

“Presently NERC has established at least one Forum office in all the Discos to act as an appellate body in resolving complaints from electricity customers not satisfactorily resolve by the Customer Complaints of the Discos.

” It is important to state that the commission had previously abolished bulk billing in its ruling on the VGC CASE NO:NERC/H/03/07 (copy attached). This case was brought by a customer againstthe VGC Estate Management and the Eko Electricity Distribution Company in 2008.

“The commission ruled in favour of the customer. The decision of the commission stipulated that the every customer is expected to be metered individually irrespective of the status of supply coming into the area and the class of billing should be on R2 or as appropriately determined by the Disco.

“The commission has however provided a leeway for estimation in situations where residential meters are not provided to customers. This is provided in the Estimated Billing Methodology Regulation of the Commission.

“In this instance, statistical meters installed at transformer sub stations are used to calculate the energy to be used as basis for estimating customers on the feeders.

“Communities who are placed on bulk billing should reject it and insist on individual metering. The Commission is in the process of completing public consultation on a proposal to cap the amount an unmetered customer can pay until he or she is metered.

“The proposal will also commit distributioncompanies to strict deadline for metering of all its customers. In the interim,the Commission has abolished connection of new customers without meters.

“Section 32 of the EPSR Act 2005 mandates the commission to approve tariff that allows investors recover their prudent cost with reasonable return on the assets invested in the business.

“The operators invest in assets on a regular basis and recover their investment through fixed charge paid by the consumers.

“In addition to this, it should be noted that once an asset is bought and a consumer is connected to the network, the utilities by law are expected to recover the cost of that investment whether energy is supplied or not.

“Secondly, fixed charge is not tied to consumption as stated above and it is not peculiar to Nigeria alone. Many utilities all across the world charge fixed charge.

“In essence, it is a universal practice and practised in many countries allover the world. Fixed charge is separately identified on bills in most countries,and is often called the ‘daily supply charge’ or ‘service to property’ charge. It can be displayed as a daily rate on customer’s bills in some countries, but may appear as a single figure for a billing period.The generators are paid both capacity and energy charge.”