Abolish Fixed Charges, Senate Tells Electricity Regulatory Body

NERCThe Senate has urged the Nigerian Electricity Regulatory Commission (NERC), to abolish fixed charges collected from electricity consumers.

Federal lawmakers at Tuesday’s plenary session, made the resolution after reviewing the operations of the electricity Distribution Companies (DISCOs) since the unbundling of the Power Holding Company of Nigeria.

The Senate urged the commission to advise the DISCOs to end bulk metering as well as halt the practice of making consumers pay for poles and transformers, which by law, are properties of electricity distribution companies.

Most of the Senators, who contributed to the motion, narrated tales of woes on electricity supply and billing in their constituencies, accusing the DISCOs of running fraudulent operations and acts of extortion.

Some of the lawmakers said that while they expected the privatisation of the power sector to guarantee stable power supply, the situation had grown from bad to worse.

In a special report by Channels Television, residents of Karamajiji, a settlement in the Federal Capital Territory, had lamented the outrageous electricity bills which the distribution company hands down to them every month end.

The Senators have now said that consumers should give notice of where they purchase items to the DISCOs and the DISCOs should in turn be entitled to recover their expenses from subsequent consumption of electricity.

Power Sector: DISCOs Object To NERC’s Fixed Charge Removal Order

power-plant-with-meterElectricity distribution companies have rejected the order for the removal of fixed charges by the Nigerian Electricity Regulatory Commission.

The order stipulates that a customer would not be liable to paying the fixed charge if he does not receive cumulative electricity supply for a period of 15 days in a month.

The multi-tariff order which commenced in 2012 provides that a retail tariff be paid by electricity consumers with two components; an energy charge and a fixed charge.

While the energy charge is for electricity consumed, the fixed charge is for capital cost, fixed operations and maintenance which consumers are compelled to pay whether or not electricity is supplied.

Following numerous complaints by electricity consumers, the Nigerian Electricity Regulatory Commission then put out the directive to distribution companies to stop fixed charges if electricity is not supplied for 15 consecutive days in one month.

This order has, however, caused uproar among electricity distribution companies. They claim that such an order would create chaos in the industry as there were still no statistical meters to determine which customers were supplied energy at any given time.

While some key players in the industry believe that the fixed charge be applicable only for energy supplied, other say there is the need to protect the DISCOs from running aground with unsettled costs.

The Chairman of the regulatory commission said that all relevant issues must be considered and a middle ground reached to ensure that the regulation on electricity charges is fair and balanced for licensees, consumers and investors in the industry.