© 2019 - International Centre for Investigative Reporting
Estimated billing: Nigerians relive experiences as electricity regulator, NERC, “slowly” intervenes
UMAR Labbo, 36, was in good spirits when he moved with his family of three into a rented apartment in Nyanya, a suburb of Abuja in 2017, and when he received the first electricity bill for his one-bedroom flat he knew something was off.
The bill received from Abuja Electricity Distribution Company, AEDC, stated that he was owing N112,777 as his outstanding arrears barely a month he moved into the house.
The debt owed by the former occupant of the house was added to his own monthly charge of N10,000, but despite his explanations, officials of the AEDC did nothing.
Rather they insisted he would have to offset the previous debt by paying in parts or risk being disconnected.
“It is ridiculous how they charge me monthly without regard to the appliances being used in the house or the supply of power which is erratic. I have applied for a prepaid meter to be able to monitor how much electricity I have consumed but since last year they are yet to deliver it,” he said.
Distribution companies in the country had charged between N25 to N30 for 1 Kilowatt Hour, Kwh, of electricity, consumed on the national grid for the use of each domestic appliance per hour though the charges depend on the type of tariff plan which could be residential or commercial.
“The officials just put down figures they feel like and expect us to pay without taking note of the gadgets in our homes or the number of times they supply power so what is the essence of the estimated bills for houses without meters,” he told The ICIR.
For Labbo, this pattern of “estimated billing” by the AEDC has become very familiar and unfair but without a prepaid metre, the practice has continued, especially during the nationwide lockdown.
In February, the Nigerian Electricity Regulatory Commission, NERC, the nation’s power regulator announced limits on estimated bills to be issued by electricity distribution companies also known as DisCos to unmetered customers placing the maximum monthly tariff charged a residential customer at N1,872 per month.
— NERC Nigeria (@NERCNG) February 26, 2020
However, the limits placed by the regulatory agency has been flagrantly disregarded by the electricity distribution companies as tales of outrageous charges by electricity consumers have continued to emerge.
Labbo’s frustration reflects the plight of 4.09 million Nigerians who do not have access to prepaid meters according to a Price Waterhouse Coopers, PWC, 2019 report as they recount tales of outrageous bills that do not reflect the electricity they consumed in their homes.
Tales of unfair treatment, extortion
In a report, Funke Osibodu, Chief Executive Officer, CEO, of Benin Electricity Distribution Company, BEDC, said during the lockdown, the DisCos experienced supply disruption, rising cost due to exchange rate volatility and loss of revenue.
“Our costs have gone up but revenue has gone down, as our industrial and commercial customers have been hard hit leading to drop in demand,” she said.
During the shutdown which affected several religious and industrial clusters, electricity consumers across the country who have no meters have borne the financial burden of estimated electricity bills.
Benjamin Uzordimma resides in a two-bedroom rented flat in Omilani off Ijesha in Surulere, a suburb of Lagos State under the Eko Electricity Distribution Company, EkoDisco, an apartment he moved into 16 months ago.
He started to worry when his electricity bills rocketed from N9,000 in December 2019 to N21,000 in April without a change in the appliances he used in the house.
“It is a serious problem for me because there is no change in what I have been using in my house and the bills keep rising without reason and the worst of all is that they don’t factor in the number of times they supply power which on some bad days for three days on a stretch they won’t supply power,” he told The ICIR.
Social media has also been flooded with complaints about the crazy estimated bills charged electricity customers as they vent their displeasure with the DisCos on Twitter.
A Twitter user identified as Ikechukwu Bobo, who lives in Ijeshatedo in Surulere, Lagos state in a compound with six single rooms with six occupants said their bill rose from N13,000 to N28,000 despite the incessant power cuts.
Another Twitter user known as Chukwuka Steven said EkoDisco kept increasing his estimated electricity bill though he was on a residential electricity tariff plan.
“I stay in Satellite town in Lagos State precisely in a three-bedroom apartment and my bill for just this month was 37k. I was wondering if I had a mini-factory in my house,” he said.
BEDC was not left out. Their customers are complaining of being ripped off. Iyinta Ijesha, recounting his ordeal said he was shocked after being presented with an outrageous bill even though they lacked power supply for two weeks.
“I have been paying heavily for no energy from BEDC under the guise of estimated billing from Olorunshogo area of Ekiti state. Between April 8 and 29th, there was no energy supply, but at the end of the month, they brought N11,800 bill. I was dumbfounded,” he said.
In 2019, according to data obtained from the Nigeria Bureau of Statistics, NBS, about 7.48 million residential households are connected by the distribution companies, but only 3.39 million households are metered which means 54.7 per cent of electricity consumers in the country have no meters.
The dilemma of electricity consumers who are placed on estimated billing as they relive their experiences is an indication that NERC did not ensure electricity distribution companies complied with the capping of estimated billing as the extortion cycle continued.
The failed order
NERC had issued Order No/NERC/197/2020 on capping of estimated billings in Nigerian Electricity Supply Industry, NESI, on February 20 to prevent electricity consumers from being charged arbitrarily by DisCos.
The Order revoked the NERC (Methodology for Estimated Billing) Regulations 2012 and placed a restriction on the estimated bill to protect unmetered R2 (Residential-single and 3-phase meters, who consume more than 50kWh per month) and C1(Commercial-single and 3-phase meters, small businesses) customers from arbitrary billing and facilitate their metering process.
It was expected that DisCos would recognise tariff class A1 customers which include customers using grid-connected premises for schools, religious houses amongst others that need single or 3 phase meters by identifying and getting them metered by April 30.
The capped rates are N1,872.00 for R2, where consumption is capped at 78-kilowatt hour per month at a tariff of N24 per kilowatt.
Also, all residential customers who consume no more than 50-kilowatt hour (R1 Customers) per month shall be billed N4 per kilowatt-hour at a total maximum of N200 per month.
The order directed that any customer whose current estimated bill was below the capped price should be without upward review until the installation of a meter by the DisCos.
While a customer who rejects the installation of a prepaid meter should be disconnected by the DisCo.
On June 9, NERC issued a notice of intention to commence enforcement action against seven distribution companies namely Benin, Enugu, Eko, Ikeja, Kano, Kaduna and Port Harcourt.
They are expected to respond to the notice within 14 days over their failure to comply with NERC’s order on capping of unmetered residential and commercial electricity customers.
The Nigerian Electricity Regulatory Commission has issued notices of intention to commence enforcement action against Seven electricity distribution companies over their failure to comply with the Order 197/2020 on capping of unmetered R2 and C1 electricity customers.
— NERC Nigeria (@NERCNG) June 9, 2020
Speaking to The ICIR, Mike Faloseyi, NERC spokesperson in a phone interview when asked why it took four months for NERC to call the distribution companies to order for violating its law, said they were following “due process”.
“Its because we are following the due process we have to consider all the parties involved in the case that is why we took time before we served them notice,” he said.
However, the order issued by NERC in February had stated that customers on higher tariffs should be metered by April 30 or they were to remain connected to supply, but without further payment to the DisCos until a meter is installed for them.
Customers are still waiting to see if NERC would rise to its responsibilities.