NERC ORDERS ELECTRICITY COMPANIES TO STOP FIXED CHARGES AS DIRECTED BY SENATE

The Nigerian Electricity Regulatory Commission at the weekend directed electricity distribution companies (Discos) to restructure their billing system to ensure that electricity consumers pay for only what they consume. NERC’s compliance with the resolution by the Senate on August 11 ordering the stoppage of arbitrary billing of consumers was a radical departure from a seeming tradition of levity towards legislative resolutions by federal executive bodies.
NERC also directed the Discos to stop the bulk metering of consumers, saying it agrees with the Senate that bulk metering should be immediately replaced with individual metering.
A letter addressed to the Senate by the NERC chairman, Dr. Sam Amadi, at the weekend, stated,
“The commission agrees with the Senate’s position on the need to eliminate the practice of bulk billing residential customers and replace the practice with individual metering and billing. It is important to state that the commission had previously abolished bulk billing in its ruling on the VGC Case CASE NO: NERC/H/03/07 (copy attached). This case was brought by a customer against the VGC Estate Management.”
Amadi added that NERC would ensure that whatever Discos proposed for its approval was fair, reasonable and meant to improve the quality of power supply to consumers.
He stated, “In recognition of the negative impact of the fixed charge, the commission has held several public consultations to ascertain a measure that will guarantee financial viability in the industry and not expose consumers to paying for electricity not consumed. Based on the intervention of the commission, the distribution companies have agreed to find a way to restructure the fixed charge such that a consumer who does not receive electricity supply does not pay the fixed charge.
“This remodelling of the fixed charge will be part of the on-going tariff review process being conducted by the distribution companies. NERC will continue to ensure that whatever model is presented for its approval is fair and reasonable, and ensures the survival of the new electricity market and improves quality of supply to consumers…
“The decision of the commission stipulated that every customer is expected to be metered individually, irrespective of the status of supply coming into the area, and the class of billing should be on R2 or as appropriately determined by Disco.”
Amadi further disclosed that the commission had provided a leeway for the application of estimated billing, saying estimation should only be applicable in situations where residential meters are not provided to customers. He said that communities placed on bulk billing arrangement should immediately reject it and demand individual meters.
The NERC chairman said, “The commission is in the process of completing public consultation on a proposal to cap the amount an unmetered customer can pay until he or she is metered. The proposal will also commit distribution companies to strict deadline for metering of all its customers.
“In the interim, the commission has abolished connection of new customers without meters.”
The Senate had in the resolution of August 11 rejected the extortion of bills from Nigerians by Discos through fixed charges, bulk metering, and similar practices. This followed a motion moved by Senators Sam Egwu (Ebonyi North) and David Umaru (Niger East), titled, “Unfair trade practices of Electricity Distribution Companies in Nigeria.”
The Senate directed NERC to immediately abolish fixed charges on electricity consumption and bulk metering of communities. It also ordered NERC to ensure that the people paid only for energy consumed.
In the past, the non-implementation of National Assembly resolutions by agencies and bodies under the executive arm of government had been a source of friction between the federal legislature and the executive. The height of the lack of respect for legislative resolutions was in September 2012, when then Minister of Information, Mr. Labaran Maku, said a resolution passed by the Senate asking the president to halt the introduction of N5000 bank note was a mere advice that was not binding.
Two other presidential aides of the then president, Dr. Gookluck Jonathan, Ahmed Gulak and Doyin Okupe, had also made similar comments regarding motions adopted by the Senate and House of Representatives.
Some of the resolutions of the Seventh Senate that were ignored by the executive included the call for the dismissal of Abdulrasheed Maina as Executive Director of Pension Reform Task Force over alleged misappropriation of over N195 billion pension fund and his continued refusal to obey summons by the upper chamber. Despite the Senate resolutions, Maina was parading the streets of Abuja with a retinue of security aides. Not even the warrant of arrest issued by the then Senate President, David Mark, made any difference.
Another important resolution passed by the Senate was the call on the federal government to immortalise the late Dr. Stella Ameyo Adadevoh, who contracted – and later died – from the Ebola Virus Disease while trying to prevent a potential Ebola epidemic by restraining the Liberian, Patrick Sawyer, who had brought the disease to Nigeria.
The Senate had also on July 24 last year asked the federal government to ensure judicious use of ecological funds by putting in place measures aimed at bringing a lasting solution to the recurrent problem of ocean surge along coastal lines in different parts of the country. The Senate also told the National Emergency Management Agency to send relief materials to Nigerians who had already been displaced by ocean surge in coastal areas.
The resolutions were ignored.
The directive by NERC to the electricity distribution companies to restructure their billing pattern in line with a Senate resolution was a marked difference from the previous practice.