Wednesday, 15 January 2020 04:06

NERC admits Nigerians paying for electricity not consumed

THE National Electricity Regulatory Commission (NERC) said on Tuesday   that  electricity consumers in the country are being fleeced by distribution companies (DisCos).


It said that both private and commercial consumers were paying “partially” for electricity not delivered to them.

The commission, which blamed the development on lack of synchronisation between the Transmission Company of Nigeria and the 11 DisCos, also said only 50 per cent of electricity consumers had meters.

Sharfideen Mohammed, a  representative of  NERC  Chairman, Professor James Momoh , spoke during  a meeting with the House of Representatives Committee on Power. The meeting was called to discuss the planned tariff increase, which the electricity regulatory agency said would come into effect in April.

Mohammed, who is NERC’s General Manager, Marketing Competition and Rates, told   the committee members  that, prior to the tariff  increase plan, the  Federal Government informed NERC that it would  begin a gradual withdrawal of subsidy from January  and put an end to it in July.

According to him, the government ordered that the Discos should maintain the current tariff regime till April.

While blaming the  poor power supply on the TCN  and the Discos, he said:  “We made provision that capacity utilisation will improve with  time. Unfortunately, due to a number of constraints   both on the side of the Discos and TCN, we haven’t made much progress.

“Their (DisCos) capacity to accept energy and deliver to customers are limited. The generation companies can tell you they are able to deliver about 5,000Megawats or 6,000 MW but the DisCos may not be able to take them. TCN is supposed to dispatch that.

“Sometimes, some DisCos might need this power but the TCN may not be able to deliver. So, you find out that there is a mismatch.

“This is what the government is trying to work on right now.”

When asked by the  Chairman of the House Committee on Power,   Aliyu  Dau, if the mismatch was responsible for why Nigerians were  paying for electricity they did not consume, he  replied with one word: partially.

He also explained that the ‘minor’ review of tariff  that led to the  controversial hike were based on  micro-economic indices such as  exchange rate of naira to the dollar, inflation rate both locally and internationally, the generation capacity   utilized, projection for the future  and  changes in fuel prices globally.

He added that, based on forecast  of what might happen in future, the commission arrived at an aggregate price of N55 per kilowatt  of  electricity.

Mohammed  added that because   government planned  withdrawal of  subsidy on electricity, every consumer was expected to  pay the same amount of N55.  But, he explained that the aggregate  tariff of  N55  might be  higher in some places.

He said the tariff differential across the country  was because the DisCos  have different operating costs and losses.

On the number of Nigerians that have benefited from pre-paid meters so far, the NERC official replied, “I am not in a position to give exact figures of how many meters have been installed under this programme by  each of the DisCos.”

But, when the committee chairman asked him to find out how many Nigerians have meters, he said “about 50 per  cent.” His  answer generated instant  disapproval from those present.

A mild drama however ensued when the Acting  Permanent Secretary in the Ministry of Power, Ahmed Abdul,  was also quizzed by the committee. He appeared ignorant of a  bill passed by the House on  estimated billing.

The committee chairman, had  told him that the bill  was  transmitted to the  Executive but still went ahead to  ask  him:”Where is that bill?

In his response, the Permanent Secretary said: “I have heard of the bill on estimated billing which you said has become a law. If it has become a law, we are going to look for a copy and start implementation.”


At this point, Magaji cut in, saying: ”I will give you one week to investigate the position of the bill and ensure its signing  by the President (Muhammadu Buhari) because after this meeting, we are going to agree on things to do. One of the things we want your  Ministry to do is to ensure that the bill becomes a law.

“ We are waiting for the President’s assent. So that bill is between your Ministry and the office of the Attorney-General of the Federation Find out in a week and get back to us.”

On  the tariff increase, the committee urged NERC  to direct the DisCos to suspend its implementation pending adequate  consultations.

It  directed  the  acting permanent secretary to officially communicate all  relevant agencies regarding the need to  suspend the tariff implementation.

The committee chairman said: “There are so many unresolved questions. We have to do it logically to ensure that at least… all of us know the feedback from Nigerians..

“On behalf of this committee, I will liaise with the Senate Committee; put this on hold until proper consultations are achieved. The committee is directing you to halt this process until the honourable speaker(Femi Gbajabiamilla) finishes his consultation.

“We also expect that the customers must have their own meters before a review is done.

“We want to know  how many customers have meters that we now want the rate reviewed.

“I am sure that the DisCos are very happy with the review. We want that bill to become a law so that it will be criminal to have estimated billing in this country.”



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