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.”