In response to a recent tariff increase, Nigeria’s Electricity Distribution Companies (DisCos) are mandated to establish online platforms by April 10 for customers to verify their electricity status. The government’s decision to raise electricity prices primarily affects customers receiving a 20-hour daily power supply, designated as Band A. Following requests from DisCos to review rates, the Nigerian Electricity Regulatory Commission (NERC) approved the tariff hike. However, customers in Bands B, C, and D remain unaffected.
Under the new rate, electricity will cost ₦225 ($0.17) per kilowatt-hour (kWh), a significant increase from the previous ₦68 ($0.052) per kWh. NERC has directed DisCos to ensure transparency and clarity for affected customers, outlining specific actions to be taken: DisCos must maintain only the newly approved Band A feeders listed in their April 2024 supplementary orders for vending to prepaid customers and billing for postpaid customers.
DisCos must promptly publish on their websites the schedule of approved Band A feeders affected by the rate review. DisCos are required to establish a portal on their websites by April 10, 2024, allowing customers to check their current Bands using meter or account numbers. Customers incorrectly billed at the new rate must receive refunds through energy tokens by April 11, 2024, with evidence of compliance filed by April 12, 2024. NERC will monitor compliance and provide necessary support to stakeholders. NERC issued these directives on Saturday, emphasizing the need for fair practices in the electricity sector.
Watchdog Advocates Fairness in Electricity Sector
Meanwhile, the Federal Competition and Consumer Protection Commission (FCCPC) praised NERC’s intervention against the Abuja Electricity Distribution Company (AEDC) for overcharging customers. The FCCPC’s commendation includes a mandate for AEDC to reimburse customers in Bands B, C, D, and E who were wrongly billed above permitted tariff bands, in addition to a fine of ₦200 million (approximately $154.1 million). Dr. Adamu Abdullahi, Acting Executive Vice Chairman of FCCPC, emphasized that unless consumers in lower bands are metered, DisCos should not migrate them to higher tariff bands to prevent exploitation and uphold consumer rights.
Stakeholder Reaction
The directive from NERC has sparked mixed reactions from various stakeholders, particularly from consumer advocacy groups and industry experts. Consumer advocacy groups, while welcoming the move towards transparency and fairness, expressed concerns about the implementation timeline and the potential challenges customers may face in accessing the online portals. They urged DisCos to ensure that the portals are user-friendly and accessible to all customers, including those in remote areas with limited internet connectivity.
Industry experts lauded NERC’s efforts to address the issue of overcharging and ensure compliance with regulatory guidelines. They emphasized the importance of effective monitoring and enforcement to prevent future instances of tariff abuse by DisCos. The implementation of the directive poses several challenges for DisCos, including the need to upgrade their existing IT infrastructure to support the online portals and ensure seamless integration with customer billing systems. Additionally, DisCos will need to invest in customer education and awareness campaigns to inform customers about the new verification process and address any concerns or misconceptions.
However, the directive also presents opportunities for DisCos to improve customer engagement and satisfaction by providing transparent and accessible channels for verifying electricity status. By leveraging digital technologies, DisCos can enhance operational efficiency and build trust with customers, ultimately contributing to a more sustainable and reliable electricity supply ecosystem.
