Protecting Electricity Consumers With Estimated Billing Disincentives

As part of efforts to protect electricity consumers from unfair billing, the Nigerian Electricity Regulatory Commission (NERC) has set in motion actions to discourage distribution companies (Discos) from continuously billing unmetered customers through estimated method.

Part of the actions being considered by the NERC is the capping of revenue that Discos can generate from their customers through estimated billing. The proposed options include capping by building size, load, energy consumption and amount paid per month. This will mean that Discos will not be able to bill consumers beyond certain levels as the regulator will peg the amount based on any of the options.

The process has begun with a consultative forum recently organized by NERC in Abuja where it disclosed the intention to take away whatever incentives that drive Discos in the electricity industry to continually disregard plans to provide prepaid meters to customers in their networks in preference of estimated billing which in most cases are unfair.

The development according to NERC follows complaints from hundreds of unmetered electricity consumers who are being unfairly billed through the estimated method. In most cases despite having made payments for prepaid meters, the Discos remain unwilling to provide such customers with meters.

Speaking at the session, Chairman of NERC, Dr. Sam Amadi, pointed out that the decision to discourage estimated billing is further informed by the fact that most Discos have utterly disregarded and abused the estimated billing methodology which the Commission introduced to primarily address the sector’s shortfall in metering of customers and revenue generation.

According to NERC, its decision therefore, to cap revenues accruable to the Discos from estimated billing is intended to inspire aggressive metering of consumers across all Discos. The propositions, Amadi however, stated were still open for industry comments and suggestions.

He said: “Let me be very clear that we want to start to open up these propositions for industry comments. We hope that stakeholders will send much more deeply considered views on these issues. All of you are aware of efforts by the Commission to encourage aggressive metering of consumers, which is a core responsibility of distribution companies.

“We started with the N2.9 billion metering subsidy released during the days of Power Holding Company of Nigeria. During the MYTO-2, we also put 18 months period during which all consumers should be metered, at the end of 18 months, no visible progress was made,” Amadi said.

Speaking further, he explained that the Commission initiated the Credited Advance Payment for Metering Implementation (CAPMI) scheme whereby consumers who could not wait long to be metered by the new owners can pay for meters and get metered within 45 days and further get compensated through energy credit from the fixed charge component.

This was initiated following complaints by Discos, that they could not finance the cost of metering customers within a short period. But sadly, most Discos have even refused to meter customers who have made such payment, thus giving credence to claims that they prefer to unfairly profiteer by billing customers through estimated method.

Regretting that none of the initiatives yielded desired outcomes, Amadi said, “Within the same period, estimated billings continued to grow, consumers continued to complain about outrageous, exorbitant bills arising from estimation.”

This new initiative therefore, Amadi said, is aimed at building on previous initiative with an objective to shift the economic incentive for metering back to the Discos instead of the consumers. “And the idea is to cap the revenue that would come from unmetered consumers on the basis that that could encourage the distribution companies to do more to meter those consumers,” he said.

 

 

Protecting Electricity Consumers With Estimated Billing Disincentives