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Electricity Fixed Charges: Regulator Says Abolition Not Possible

The Nigerian Electricity Regulatory Commission (NERC) has ruled out the abolition of fixed charges on electricity tariffs, as recently directed by the Senate. An official … Continue reading Electricity Fixed Charges: Regulator Says Abolition Not Possible


NEMSA, DISCOs, Meter

power-plant-with-meterThe Nigerian Electricity Regulatory Commission (NERC) has ruled out the abolition of fixed charges on electricity tariffs, as recently directed by the Senate.

An official of the regulatory body said that the directive undermined the electricity laws enacted by the National Assembly.

The Chairman of the NERC, Dr. Sam Amadi, told reporters on Monday that taking such a decision without appropriate consideration could cause a collapse in the power sector.

Dr. Amadi said that due process, which is currently ongoing, could cause a review of fixed charges to ensure free and reasonable costs to consumers.

He reiterated that the fixed charges were legal and an important part of electricity pricing framework that supports the functioning of electricity generation, transmission and distribution, without which the sector might collapse.

Exploitative In Nigeria

He said fixed charges were part of electricity market globally but tends to be exploitative in Nigeria, as a result of epileptic power supply for which consumers are compelled to pay, a trend he said would change, as electricity generation and supply improve.

Since the unbundling of the Power Holding Company of Nigeria and the introduction of distribution companies, the power sector has been beset by complaints of outrageous electricity bills and tariffs by different levels of consumers.

On July 11, 2015, the Senate asked the NERC to abolish fixed charges paid by electricity consumers across the country.

To eliminate the negative impact and perception of the fixed charges, Dr. Amadi said the commission had mandated the distribution companies to restructure the charges to ensure that it was proportionate to actual electricity consumed.

Also addressed by the commission was consumers’ concern on estimated billing which the NERC boss said a public consultation would soon be conveyed towards introducing a benchmark for estimations to end outrageous bills.