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NERC Imposes N105bn Sanction on Discos for Overbilling Customers

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The Nigerian Electricity Regulatory Commission (NERC) announced on Friday that it would penalize 11 power distribution companies by deducting N10,505,286,072 from their annual allowed revenues during the next tariff review. This penalty is in response to their non-compliance with the capping of estimated bills for unmetered customers.

NERC made this announcement in a notice from Abuja, indicating that the billing of unmetered customers in 2023 by the distribution companies revealed a failure to adhere to the monthly energy caps set by the commission.

The Discos will have to pay approximately 10% of the amount they overcharged their customers between January and September 2023. NERC’s separate orders established that the power firms overcharged their customers by about N105bn in nine months.

For instance, Abuja Disco overcharged its customers without meters by N17.874bn, while Eko Disco overcharged its unmetered customers by N13.137bn.

Port Harcourt Disco overcharged its customers without meters by N14.187bn, and Kaduna Disco overcharged its customers by N1.145bn.

NERC has ordered the Discos to fully refund the overcharged customers and ensure compliance in the future. Additionally, to prevent future occurrences, a 10% fine has been imposed on the utilities.

NERC frequently issues orders specifying the maximum amount that any unmetered customer should pay to the distribution company for electricity services until they are metered by the company.

In their notice on Friday, NERC stated, “The public may recall that in 2020, the commission issued the order on Capping of Estimated Bills (Order No: NERC/197/2020) and subsequently issued monthly energy caps which aimed to align the estimated bills for unmetered customers with the measured consumption of metered customers on the same supply feeder.”

“A review of the electricity distribution companies’ billing of unmetered customers for 2023 has revealed non-compliance with the monthly energy caps issued by the commission.”

To address this and protect unmetered customers from arbitrary billing by Discos, the commission has issued the order on Non-Compliance with Capping of Estimated Bills (Order No: NERC/2024/004-01 4) pursuant to Section 34(1)(d) of the Electricity Act 2023.

The order specifies actions such as credit adjustments for overcharged customers, public notices to publish the list of credit adjustment beneficiaries, and regulatory sanctions imposing a deduction from the annual allowed revenues of the 11 Discos during the next tariff review to deter future non-compliance.

Consumers nationwide have consistently lodged complaints against excessive estimated bills by power distribution companies in Nigeria. NewsNow reported that power consumers lodged 333,947 complaints related to metering, billing, and service interruption within a three-month period.

According to the 2023 third quarter report of NERC, there was an increase in customer complaints compared to the preceding quarter. It stated that Ibadan Disco received the highest number of complaints, while Abuja Disco received the least.

The most frequently reported issues among the complaints were metering, billing, and service interruption. Out of the 333,947 complaints received, 317,179 were resolved, resulting in a resolution rate of 94.98 percent.

Meanwhile, NERC reaffirmed its commitment to regulatory compliance and consumer protection within the Nigerian Electricity Supply Industry on Friday.

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