NERC Fines Abuja DisCo, Eko DisCo, 9 Others N10bn for Overbilling Customers N105bn

• NERC has announced sanctions on some electricity distribution companies in Nigeria over excess charges on customers
• The regulatory agency has effected a fine of 10% of the excess charges they levied on their customers
• NERC said this would serve as a deterrent against further non-compliance to the capping of estimated bills for customers

Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology and the stock market.

The Nigeria Electricity Regulatory Commission (NERC) has imposed a penalty of N10.5 billion on the 11 electricity distribution companies (DisCos) operating in the country.

NERC said this is due to their failure to adhere to the regulations concerning the capping of estimated bills for customers without meters.

The electricity regulatory agency disclosed this in a statement titled, "NERC sanctions eleven (11) DisCos over non-compliance with the capping of estimated bills for unmetered customers," posted on its X page.

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The development comes in the wake of the federal government's approval of an upward revision of electricity tariffs for consumers.

NERC sanctions DisCos 10% of excess charges

According to the Punch, the commission clarified that the DisCos would be required to reimburse approximately 10% of the excess charges they levied on their customers between January and September 2023.

Through separate directives issued to the DisCos, it was determined that these power companies collectively overcharged their customers by approximately N105 billion over the span of nine months.

Notable instances include Abuja Disco, which overcharged its unmetered customers by N17.874 billion, and Eko Disco, which imposed excess charges amounting to N13.137 billion on its unmetered customers.

Similarly, Port Harcourt Disco was found to have overbilled its customers without meters by N14.187 billion, while Kaduna Disco overcharged its customers by N1.145 billion.

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Fines to serve as deterrent to DisCos

As per NERC's directive, the deduction will be extracted from the annual permitted revenues of the 11 DisCos in the subsequent tariff evaluation, serving as a deterrent against potential breaches of the energy caps.

The statement partly read:

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 determine future non-compliance with the energy caps approved by the Commission.

Additionally, NERC has mandated the DisCos to provide credit adjustments to all customers without meters who were overcharged from January to September 2023, ensuring completion by the billing cycle of March 2024.

The Commission used the opportunity to restate its dedication to upholding regulatory standards and safeguarding consumer interests within the Nigerian Electricity Supply Industry.

Earlier, NERC established regulations outlining tariff allowances for mini-grid operations within the country.

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Speaking on the matter with Legit.ng, Kayode Alamu, a subscriber of one of the DisCos expressed that the fine on the DisCos is not enough.

He said:

Firstly, I commend NERC for even penalising the DisCos for these illegal and excessive charges. It is wrong to overcharge Nigerians who are already facing so much hardship.

However, the problem is that the penalty is insufficient. If you penalise someone to only pay 10% of what he has obtained illegally, it doesn't deter the person from committing the wrongful act again.

Alamu therefore advice the regulatory agency to excise stiffer penalties in subsequent times.

NERC dissolves Kaduna DisCo's board over N110bn

In related news, Legit.ng reported that NERC dissolved the board of Kaduna DisCo over N110 billion debt.

According to the regulatory agency, dissolution came following the company's inability to meet its obligations, which amounted to N182.16 billion in the last four years.

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NERC said in a 9-page order signed by its chairman, Sanusi Garba, and vice chairman, Musiliu Oseni, that the dissolution took effect from January 1, 2024.

The amount includes N51.9 billion market remittance shortfall, N25 billion minimum capital expenditure requirements, and N11.46 billion operations expenses requirement for 2023.

Source: Legit.ng