Nigerian DisCos Overcharge Unmetered Customers by $70 Million

NERC Fines DisCos, Mandates Credit Adjustments for Overcharged Consumers

by Ikeoluwa Juliana Ogungbangbe
Nigerian DisCos overcharging

Electricity distribution companies (DisCos) in Nigeria are under scrutiny for allegedly overcharging unmetered consumers by a staggering N105 billion (approximately $70 million) during the first nine months of 2023. According to reports, the 11 DisCos purportedly overbilled around 7.1 million unmetered electricity consumers between January and September 2023. The Nigerian Electricity Regulatory Commission (NERC) has taken a stern stance against this non-compliance, imposing a N10.5 billion (about $7 million) fine on the DisCos and mandating them to provide credits to the overcharged customers.

NERC highlighted that the commission had previously issued orders regarding the capping of estimated bills to align them with the measured consumption of metered customers. However, a review revealed significant non-compliance with these directives. In response, NERC issued an order demanding DisCos to issue credit adjustments to overcharged unmetered customers by the billing cycle in March 2024. Additionally, DisCos are required to publish the list of credit adjustment beneficiaries in national dailies and on their websites by March 31, 2024. The commission also announced regulatory sanctions, deducting the fine amount from the annual allowed revenues of the 11 DisCos during the next tariff review to deter future non-compliance.

The Federal Competition and Consumer Protection Commission (FCCPC) has voiced support for NERC’s actions, citing its mandate to protect consumers from exploitative practices by companies. This move by NERC aligns with FCCPC’s objectives to safeguard consumer interests.

Moreover, DisCos face additional pressure as they are ordered to reimburse customers who previously paid for the acquisition of meters under the Meter Asset Provider (MAP) Scheme. KPMG in Nigeria reported that NERC directed DisCos to commence repayment of meter costs to eligible customers through energy credits, effective April 1, 2023. However, many customers are yet to receive reimbursements due to financial constraints faced by DisCos.

Recognizing the delay in reimbursements, NERC revised the commencement date to April 1, 2023, and extended the reimbursement period to 10 years. This adjustment aims to ensure that customers receive their due reimbursements in a timely manner, as mandated by the regulations. The ongoing scrutiny and regulatory actions against DisCos underscore the government’s commitment to enhancing transparency, accountability, and consumer protection in Nigeria’s electricity sector. As the authorities continue to enforce compliance and address discrepancies, consumers can expect more stringent measures to uphold their rights and promote fair practices within the industry.

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