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Tag: NERC

  • BREAKING: NERC slams N200m fine on AEDC over unfair billing after electricity tariff hike

    BREAKING: NERC slams N200m fine on AEDC over unfair billing after electricity tariff hike

    The Nigerian Electricity Regulatory Commission (NERC) has slammed a N200 million fine on the Abuja Electricity Distribution (AEDC) over unfair billing after the recent electricity tariff hike.

    Recall that NERC had on Wednesday hike tariff from N68/kWh to N225/kWh for electricity consumers in Band A, who enjoy power supply for an average of 20 hours daily.

    However, AEDC owned up to having wrongly billed customers who tried to recharge their metres following the new tariff regime.

    The Management of AEDC subsequently tendered an apology for the unfair billing in a notice to its customers in Abuja on Thursday.

    In trying to explain the unfair billing AEDC stated: ”This is to inform customers across the AEDC franchise that we are aware of the wrong charges faced by some Band A customers who tried to recharge their metres following the new tariff regime.

    “This is due to a system glitch caused by the reclassification of some Band A customers who have now been downgraded to B due to the number of hours of electricity supply enjoyed over the past few weeks.

    “These erstwhile Band A customers who vended were charged the new tariff of N225 per Kilowatt Hour. Our team is working to identify the customers affected and all excess charges will be refunded”.

    According to AEDC, the situation also saw some Band A customers who are now charged N225 vend at the old rate.

    The company said that once the glitch is resolved, these categories of customers would now recharge their metres at the new rate of N225, which will ensure they enjoy a minimum supply of 20 hours daily.

    “We apologise for any inconvenience caused to our customers during this change.

    “We remain committed to improving the power supply to all categories of customers, and we crave your understanding and support as we do this, ‘’ it said.

    However, NERC would not accept the explanation of AEDC, having fined the electricity distributor N200 million for failure to comply with the prescribed customer band classifications for the tariff billing.

    In a statement issued by the NERC management in Abuja on Friday, the commission stressed AEDC was fined for non-compliance with the Supplementary Order to the April 2024 Multi-Year Tariff Order 2024 for the company.

    NERC said that AEDC will pay the N200 million as a fine for the flagrant breach of the commission’s order.

    According to the NERC, the decision follows a detailed review and customer feedback, which revealed that AEDC had applied the new tariff to all customer bands, contrary to the order, which was designed to ensure fair billing practices.

    ”AEDC is therefore mandated to: reimburse all customers in Bands B, C, D and E respectively that were billed above the allowed customer categories/tariff bands provided in the order.

    ”Reimburse through the provision of the balance of customer tokens that the affected customers would be entitled to receive at the applicable rates.

    ”And all token reimbursements shall be issued to the affected customers by  April 11, 2024,”it said.

    The commission also directed the AEDC to file evidence of compliance with the directives in a & c with the Commission by April 12.

    “The action by the commission underscores its commitment to protecting consumer rights and ensuring equitable practices within Nigeria’s electricity sector,” it stated.

  • Reps minority caucus says hike in electricity tariff insensitive, inhuman

    Reps minority caucus says hike in electricity tariff insensitive, inhuman

    The Minority Caucus of the House of Representatives says the hike in electricity tariffs across the country by the Nigerian Electricity Regulatory Commission (NERC) is insensitive, inhuman and uncalled for.

    Rep. Kingsley Chinda, the minority leader, House of Representative said this in a statement on Friday in Abuja.

    He said such an abrupt hike placed an unbearable burden on the already strained populace, exacerbating economic hardships and widening the chasm of inequality among the citizenry.

    “Such a hike, which is over 200 per cent above the rate of inflation, utterly disregards the plight of ordinary citizens, who are grappling with the adverse effects of the removal of oil subsidy.

    He said that the citizenry had been faced with, galloping inflation, unemployment, and inadequate access to basic amenities.

    *We note that in the immediate aftermath of the announcement of the tariff hike, NERC claimed that the hike affects only 12 per cent of electricity consumers who enjoy a minimum of 20 hours of electricity a day.

    “The truth has become stark that this is stark lie. The hike, from data put out by the DISCOS, affects all electricity consumers.”

    He added that this habitual resorts to decits and outright lies clearly puts government in bad light and erodes the trust and confidence of the populace in the government.

    He said, the timing of the tariff hike, amidst prevailing economic challenges, was not only insensitive but also detrimental to the well-being of Nigerians.

    He added that it further highlights the disconnect between policymakers and the realities faced by the masses of the people.

    He urged President Bola Tinubu to prevail on NERC, to rescind its decision and prioritise the welfare of the people.

    He said that transparent dialogue and inclusive decision-making processes were imperative to address the root causes of the energy sector’s inefficiencies and ensure sustainable solutions.

    This according to him is such that it would benefit all stakeholders and not consistent and persistent increase in tariff.

    He further called for increased accountability and transparency in the management of resources within the electricity sector.

    “Citizens have the right to demand efficient service delivery and fair pricing mechanisms that align with their economic realities.

    “In solidarity with the Nigerian people, we stand firm in our condemnation of this unjustifiable increase in electricity tariffs and call for immediate action to alleviate the burdens imposed on the populace, ” he said.

  • Real reason NERC hiked electricity tariff from N66/kwh to N225/kwh

    Real reason NERC hiked electricity tariff from N66/kwh to N225/kwh

    The Nigerian Electricity Regulatory Commission (NERC) has said the newly approved tariff is expected to reduce electricity subsidies for the 2024 fiscal year by about N1.14 trillion.

    Mr Musliu Oseni, the Vice Chairman, NERC said this in a statement in Abuja on Wednesday.

    ”With the newly approved tariffs, subsidies for the 2024 fiscal year are expected to reduce by about NGN1.14 trillion in furtherance of the Federal Government’s realignment of the subsidy regime.”’he said.

    Recall NERC had earlier on Wednesday announced increase in electricity tariff from N66/kwh to N225/kwh for those who enjoy electricity supply for 20 hours per day.

    What the tariff hike from N68/KWh to N225/kWh means is that a consumer who uses 100 units of electricity monthly, and have been spending N6,800 previously, will now be spending N22,500 monthly for the same units of electricity.

    NERC had explained that the tariff hike was only applicable to electricity consumers in Band A and that other customers in Bands B, C and D are not affected by the increase.

    The commission also said that some customers on the Band A to Band B were downgraded due to the non-fulfillment of the required hours of electricity provided by the electricity distribution company.

    Oseni said that the Federal Government had indicated a transition in policy direction towards introducing a more targeted subsidy regime aimed at mitigating the impact of changes in macroeconomic parameters

    ”While largely protecting vulnerable customers and fostering investments targeted at providing efficient service delivery in the Nigerian Electricity Supply Industry (NESI),” he said.

    According to him, the commission conducted a thorough review of the tariff applications submitted by the 11 Electricity Distribution Companies (DisCos) in line with the processes established in its regulations and business Rules.

    He said that the review process was preceded by an analysis of the performance improvement plans of the licences and included a public hearing during which interested stakeholders and intervenors examined the rate filing submitted by the public utilities.

    ”The overarching objective of the commission in the consideration of the tariff application is the creation of a financially sustainable electricity market providing adequate and reliable power supply to drive the Nigerian economy.

    ”The commission, upon due consideration of the tariff applications, has approved revised rates affecting only customers classified under Band Serv category which is about 15 per cent of the customer population,”he said.

    Oseni said that empirical service data had confirmed that this class of customers had truly received the committed level of service.

    He said that under the revised tariff order issued by the NERC, DisCos were under an obligation to provide customers classified under Band A service category a minimum average supply of 20 hours a day measured over a period of one week.

    ”All other customers under B to E service category and representing 85 per cent of customers population will not be affected by the current review of end-users tariffs.

    ”All DisCos have been provided with mandatory targets for investments and migration of more customers to B.

    ”The commission has established a robust monitoring framework leveraging on technology to ensure that the public has visibility of the service covenant with their service providers,”he said.

    Oseni said that an enforcement and compensation mechanism had also been established in the event of service failure.

    ”We wish to assure all Nigerians that the commission  working in collaboration with the policymakers remains committed towards providing adequate and reliable electricity to all citizens.

    ”This is as we work diligently with state governments to deliver on the gains of the Electricity Act 2023.,”he said.

  • UPDATE: NERC provides details on electricity tariff hike from N68/KWh to N225/kWh

    UPDATE: NERC provides details on electricity tariff hike from N68/KWh to N225/kWh

    The Nigerian Electricity Regulatory Commission (NERC) says the increase in tariff will only affect customers enjoying 20 hour power supply across the country.

    The commission said that other customers in Bands B, C and D are not affected by the increase.

    Mr Musliu Oseni, Vice Chairman, Nigerian Electricity Regulatory Commission (NERC) said this at a press briefing in Abuja on Wednesday.

    According to him, the commission has approved the increase in electricity tariff paid by Band A customers from N68/KWh to N225/KWh adding that the increase will not affect customers on bands B and C.

    Oseni said that the increase only affect about 15 per cent electricity consumers that have been proven to enjoy 20 hours power supply daily.

    He said that other electricity customers not affected by the rate review would not be neglected as they would still continue to get service.

    The vice chairman said that the commission had also downgraded some customers on the Band A to Band B due to the non-fulfillment of the required hours of electricity provided by the electricity distribution company.

    “We currently have over 800 feeders that are categorised as Band A, but it will now be reduced to under 500. This means that 17 per cent of the feeder now qualifies as Band A.

    “The commission using technology discovered that many of the feeders that the Electricity Distribution Companies (DisCos) currently brandish as Band A are not meeting the required service and as such.

    “The feeders were ordered to be downgraded immediately as a way of protecting consumers,” he said.

    Oseni said that customers hitherto classified as Band A customers would not be affected by the rate review.

    He said that as part of enforcement mechanisms  to ensure that  areas affected by the review get the 20 hours supply,  DisCos have been mandated to set up rapid response teams in locations where the feeders are located.

    “This is to ensure that the customers can have access to the DisCos.

    “They have also been mandated to publish the contact of the rapid response team where the customers are located.

    “Failure to meet the commitment for seven consecutive days, the feeder will be downgraded immediately to the service level the DisCos is able to provide electricity to the feeder,” he said.

    Oseni said where a DisCo  failed to meet the commitment for two days by the third day at 10am, the company must publish an explanation also via bulk SMS contacting the affected consumers on the feeder.

    “They should explain why they could not meet the service for the two days and  also submit the explanation to the commission,” he said.

  • Epileptic power: FG orders NERC to revoke licences of non-performing DisCos

    Epileptic power: FG orders NERC to revoke licences of non-performing DisCos

    The Federal Government ordered all its agencies regulating the power sector, directing the Nigerian Electricity Regulatory Commission, NERC, to withdraw licences of non-performing electricity distribution companies, DisCos.

    The government accused the DisCos of not doing enough to improve supply despite the availability of power on the national grid.

    Minister of Power, Chief Adebayo Adelabu who stated this during a meeting with the head of the agencies in Abuja said the distribution segment remains the weakest link in the electricity supply value chain on Monday.

    Chief Adelabu stressed that NERC must look for creative ways of getting the DisCos to improve supply including the imposition of stiff sanctions on utilities which fail to pick their allocations and outright cancellation of licences.

    He insisted that the franchise areas covered by the DisCos were too large, adding the government would pursue a restructuring that would create smaller DisCos with companies restricted to one state each.

    Distribution is our weakest point and it is the closest to the consumers. If we don’t get distribution right, to Nigerians, we’re not doing anything. So, efforts need to be put on this. In fact, we must intensify our efforts in ensuring that we address all issues relating to distribution.

    “It is true that the distribution companies are in the hands of the private sector. We don’t have direct control. But we need to compel them for performance. They must perform. If they do not perform, all our effort in generation, in transmission is zero. I’ve also had a meeting with the Chairman of NERC on how we’re going to address these performance issues of the electricity distribution companies across the nation.

    Why we have new policies in our power sector policy framework, which we’re going to finalize to address long-term issues in distribution, we must proffer short-term solutions to the lingering crisis. Before we get to that, we’re talking about the issue of the capitalization of the discourse, for them to inject funds, to improve infrastructure.

    “We are talking about issues of restructuring the DisCos along state lines, to make them manageable in size. Also, issuing new franchises to smaller DisCos to take over areas not being served by the existing ones or that have been underserved by the existing ones.

    I’ve said it before now that non performance of DisCos in terms of epileptic power supply qualifies as a basis for revocation of license. Any DisCo that is found-wanting will be severely dealt with because their actions or inactions directly affect the performance of the sector”.

    The Minister pointed out that wilful refusal by any DisCo to take up available power “is a qualified basis for the revocation of licences too”, adding that the distribution companies must be ready to pick up 90-99 percent of load allocated to them.”

    He described the ongoing electricity rationing across the country as unacceptable, disclosing the government plans to improve power generation from the present 4,000MW to 6,000MW in the next six months.

    This, he said, would be achieved by paying off substantial debts owed to power generation companies and gas suppliers. “So what we are looking at is to have an agreement to ramp up to a minimum of 6,000 megawatts within the next three to six months. I know that the highest we ever generated was 5,700, about three years ago. That was specifically November, 2021.

    “And this 5,700 was also distributed. If we could achieve 5,700 at that time, I believe we still have infrastructure to generate between 6,000 and 6,500. In terms of the generating companies, I have no doubt in my mind that the existing capacity can give us 6,500 once there is stability in supply of gas.

    I’ve been to a number of the generating companies and I confirmed that they have this installed capacity. And a large percentage of this installed capacity is operational, but they are not available because of low or shortage in gas supply. Once there is gas supply, we want to ramp up generation to a minimum 6,000MW”.

    He noted that while the Federal Government would continue to pay electricity subsidies in the short-term, it plans to gradually phase it out in the next three years and return the sector to a commercially driven tariff.

    Speaking to journalists after the meeting, the Managing Director of the Transmission Company of Nigeria, Engr. Sule Abdulaziz explained that the fire that engulfed its substation in Kano happened while its engineers were trying to fix a leakage from one of its transformers.

    He disclosed that power has been restored to most parts of the commercial city, adding that the remaining feeders would be restored before the end of Monday.

    “The transformer involved was having some leakages. So our engineering team went there to work on it. They took an outage, followed all the requirements to do a maintenance job and they did it successfully.

  • Kaduna Electric set to refund customers

    Kaduna Electric set to refund customers

    Kaduna Electric says it is set to comply with the Nigerian Electricity Regulatory Commission’s (NERC) directive mandating it to refund over billed customers.

    This is contained in a statement issued by the Head of Corporate Communication, Abdulazeez Abdullahi, Kaduna Electric.

    Kaduna Electric and other distribution companies in the country were sanctioned for non compliance with NERC’s Capping Order, directing them to ensure unmetered customers are not billed beyond a certain threshold.

    According to NERC,  capping is aimed at aligning the estimated bills for unmetered customers with the measured consumption of metered customers on the same supply feeder.

    Abdullahi stated that all customers who were to benefit from the refund must be ready to settle all their outstanding debts or risk disconnection.

    He added that the company was weighed down by a huge debt burden, which hampered its efforts at efficient service delivery to customers.

    “The company said it now had zero tolerance for electricity debt accumulation by customers.

    “The company which operates in Kaduna, Kebbi, Sokoto and Zamfara states, has to confront the reality with the recent developments in the Nigerian Electricity Supply Industry.

    “There distribution companies are required to ensure full remittance to the market for energy received and wheeled to it.”

    He explained that one of the major constraints hampering adequate supply of electricity had been the issue of illiquidity in the sector.

    He added that the bottleneck can only be overcome with full payments for energy consumed by customers.

  • NERC sanctions 11 electricity distribution companies

    NERC sanctions 11 electricity distribution companies

    The Nigerian Electricity Regulatory Commission (NERC), says it has sanctioned eleven Electricity Distribution Companies (DisCos) for non compliance with capping of estimated bills
    for unmetered customers.

    The commission’s management said this   in a statement in Abuja on Friday.

    The commission said that a review of the DisCos billing of unmetered customers for 2023 had revealed the non-compliance with the monthly energy caps issued by the commission.

    ”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,”it said.

    According to NERC, the capping is aimed at aligning the estimated bills for unmetered customers with the measured consumption of metered customers on the same supply feeder.

    The commission said that in response to the non-compliance, it was safeguarding unmetered customers from arbitrary billing by DisCos.

    ”The Commission in pursuant to Section 34(1)(d) of the Electricity Act 2023 (“EA 2023”), has issued the order on Non-Compliance with Capping of Estimated Bills (Order No: NERC/2024/004-014) which stipulates the following:

    ”Credit adjustment to customers: DisCos are to issue credit adjustments to all overbilled unmetered customers for the period January to September 2023 by  March 2024 billing cycle.

    ”Public Notice: DisCos have been directed to publish the list of credit adjustment beneficiaries in two national dailies and on their website not later than March 31, 2024.

    ”Regulatory Sanctions: The commission shall deduct a sum of N10,505,286,072 from the annual allowed revenues of the eleven (11) DisCos during the next tariff review, to deter future non-compliance with the energy caps approved by the commission, ”it said.

    The commission reaffirmed its commitment to regulatory compliance and consumer protection within the Nigerian Electricity Supply Industry (NESI).

  • BREAKING: NERC approves electricity tariffs hike with burden on FG

    BREAKING: NERC approves electricity tariffs hike with burden on FG

    The Nigerian Electricity Regulatory Commission (NERC) has approved electricity tariffs hike, effective January 1 2024, following a review of the Multi Year Tariff Order.

    TheNewsGuru.com (TNG) reports Chairman of NERC, Sanusi Garba made this known on Wednesday during a routine media engagement in Abuja.

    Garba, however, disclosed that the burden of the electricity tariffs hike will be on the federal government.

    The NERC Chairman stressed the Multi Year Tariff Order review and the electricity tariffs hike are in compliance with the Electricity Act 2023.

    Garba said this was after an application for tariff review by DisCos and a public hearing on the rate review.

    The Order uploaded on the NERC website states appropriate tariffs that consumers should pay for investors to recover their operating cost.

    It also contains the federal government’s policy on ensuring that due to the cost-of-living crisis, consumers will not be made to pay higher than prevailing rates.

    Cost of living crisis: FG to continue electricity subsidy – NERC

    Mr Sanusi Garba, Chairman, NERC, says the federal government will continue to subsidise electricity to ease the financial burden on Nigerians due to economic challenges in the country.

    “Government has decided for now, arising from the cost of living crisis and so many others, to in the meantime continue to subsidise electricity.

    “In the new tariff order just published by the commission, you will discover that tariff is not going up but you will see what the Electricity Distribution Companies (DisCos) should be charging.

    “You will also see in the tariff order the amount of subsidy the government will be providing to cover the gap between what they will charge and what they are allowed to charge,” he said.

    According to him, the new tariff contains what the DisCos are allowed to charge based on government policy, if they are to remain in service.

    He said that in the tariff, NERC included some provision that would ensure that the DisCos pay what they are obligated to pay.

    “The DisCos are in the business of buying electricity from the Nigeria Bulk Electricity Trading Company (NBET), so they are to pay,” he said.

    Garba said that the Electricity Act that was signed by President Bola Tinubu in 2023 presented an opportunity for states to make laws and take charge of providing electricity in their franchise areas.

    He said that the commission remained committed to working with the states in such a manner that the existing public utilities were nurtured to provide services to Nigerians and were utilised for what they were intended for.

    On metering, the chairman said that the commission had identified that the Electricity Distribution Companies had challenges with finances to meter their customers.

    He said that the rate of metering had been adversely impacted by the inability of DisCos to raise the required capital from the banks.

    “To reduce the rate of estimated billing, the commission created a framework under which the distribution companies can raise some amount of money to meter customers.

    “So we decided that from the market revenues, we set aside a fixed amount that is dedicated for the provision of metering

    “We are not saying that the money from the market on a monthly basis is the money to buy a meter.

    “It is a potential lender to raise a pathway to pay whatever loan DisCos are going to get to provide meters,” he said.

  • Reps query NERC over failed N39bn prepaid meters project

    Reps query NERC over failed N39bn prepaid meters project

    The House of Representatives has ordered the Nigeria Electricity Regulatory Commission (NERC) to explain why it registered a company without capacity to deliver but was given N39 billion to supply prepaid meters for distribution to consumers.

    Rep. James Falake, Chairman, House committee on Finance gave the order, disclosing that a company, Ziglasis was contracted by the Federal Ministry of Power and paid N39 billion to supply prepaid meters, but failed to do so after collecting the money for the project.

    The Committee queried the Electricity regulator for licensing the company which has not delivered on the contract signed and collected tax payers money.

    Falake asked the Vice Chairman of NERC, Mr Musiliu Oseni to bring the Managing Director of Ziglasis and officials of the Ministry of Power before the House on Nov 14 to explain why the company had not delivered on the contract.

    Responding, the Commission said the contract for the supply of the meters was not awarded by the Ministry.

    The Committee however insisted that since they gave the license to the company that qualified them for the contract, the commission should produce the management of the company.

    The House also queried the agreement entered into between the Nigeria Bulk Electricity Company and Azura power company in the table or pay agreement which committed the country to 30 million dollars power purchase agreement.

    Faleke said the agreement with Azura is such that whether or not the company supply power to turn national grid, the country must pay them $30 million monthly, adding that the agreement has a world Bank guarantee.

  • FG subsidized electricity with N135.23bn in Q2, 2023 – NERC

    FG subsidized electricity with N135.23bn in Q2, 2023 – NERC

    The Nigerian Electricity Regulatory Commission (NERC) on Wednesday said that the Federal Government (FG) paid a total of N135.23 billion to subsidise electricity consumption in the second quarter of 2023.

    This was made known in the commission’s Q2, 2023 report pasted on its website in Abuja.

    NERC said that the  N135.2 billion was spent by the Federal Government to plug revenue generation shortfall in the power sector in the period under review.

    It said that this indicated an increase of N99.21 billion, representing 275 per cent compared to the N36 billion it paid in the quarter I of 2023,

    The report stated that the government incurred a subsidy obligation of N135.23 billion in 2023/Q2, which is substantially higher than the N36.02 billion it incurred in 2023/Q1.

    ”The government incurred a subsidy obligation of N135.23 billion in 2023/Q2, which is an increase of N99.21 billion 275 per cent compared to the N36.02 billion incurred in 2023/Q1, ” it said.

    The commission stated that the subsidy was due to the absence of cost-reflective tariffs across all distribution companies.

    It said that the increase recorded in the period was a result of the government’s policy to harmonise exchange rate.

    The report said that on the average, subsidy obligation incurred by the government per month was N45.08 billion in Q2 2023.