FG Projects N180.8bn Electricity Subsidy in Sept, NERC Fines Discos N8.3bn for Overbilling

Emmanuel Addeh in Abuja

The federal government is expected to pay about N180.8 billion as electricity subsidy for power consumers from Bands ‘B’ to ‘E’ that have had their tariffs frozen since December 2022, THISDAY learnt yesterday.

Besides, the Nigerian Electricity Regulatory Commission (NERC) has fined the 11 Distribution Companies (Discos) roughly N8.3 billion for overbilling their customers in recent times, with an instruction for them to compensate the impacted electricity consumers.
These were made known in the September 2024 Supplementary Order of the Multi Year Tariff Order of 2024 released by the Sanusi Garba-led power sector regulator yesterday in Abuja.

A THISDAY review of the orders indicated that Abuja Disco had the highest fine with N1.69 billion, followed by Eko Disco with N1.41 billion, while Ikeja Disco was instructed by NERC to pay N1.41 billion for the infraction.

The other Discos that were impacted by the order were: Jos Disco with N1.338 billion; Port Harcourt Disco was fined N1.16 billion; Benin Disco was fined N804 million;  Enugu Disco will pay N310m; Ibadan Disco will shed N15 million while Kaduna Disco has  N115 million to pay.
Besides,  Yola Disco was fined N54 million and Kano Disco will pay N20 million for the same offence.

The order  which also saw tariffs unchanged for the month of September, was signed by NERC’s Vice Chairman, Musiliu Oseni and Commissioner for Legal, Licensing, and Compliance, Dafe Akpeneye.

According to the sector regulator, the penalty was  a response to the Discos’ non-compliance with previous directives aimed at capping estimated billing for electricity consumers.

The power distributors are also expected to publish explanations on their websites within 24 hours if they fail to provide a committed level of service on Band ‘A’ feeders for two consecutive days.

NERC stated that the Discos shall be held accountable for service deliveries per commitments under its Service Based Tariff (SBT) proposals that seek to align end-user tariffs in proportion to the service level enjoyed by customer clusters as measured in average hours of supply per day over one month.
The commission said it shall continue to leverage technology to directly obtain data on the hours of supply on each Band A feeder from the head-end system for the Discos for near real-time monitoring of service.
Besides, NERC in the order affirmed that Discos shall maintain a rapid response team to ensure effective service delivery on the committed minimum hours of supply to each service Band commencing with Band ‘A’ feeders.
The team, it said, shall continue to ensure timely response to customers’ complaints, fault clearing and alignment with the Transmission Company of Nigeria (TCN) regional teams for effective load management and optimised dispatch to respective feeders.

It further stated that the companies shall maintain the dedicated email and contact numbers of the service rapid response team for each customer cluster/business unit on its website and continue to circulate the same to the customers vide bulk SMS and social media handles.

 They also will be obligated to publish a rolling seven-day average daily hours of supply on each Band A feeder daily on its website no later than 09:00 am of the next day.

Where they fail to deliver on the committed level of service on a Band A feeder for consecutive two days, the Discos shall on the next day by 10.00 am publish on its website an explanation of the reasons for the failure and update the affected customers on the timeline for restoration of service to the committed service level.

In addition, where they fail to meet the committed service level to a Band A feeder for seven consecutive days, the feeder shall be automatically downgraded to the recorded level of supply pursuant to provisions of Section 6 of Order No. NERC/334/2022.

According to NERC, the Discos are also obligated by the order to procure a minimum of 10 per cent of their 2024 load allocation, to improve the reliability of supply and sustain delivery of a minimum service level under the SBT.

On the subsidy issue, NERC approved the payment of N26.4 billion for Abuja customers; N23.76 billion for Ikeja Disco; N22.21 billion for Ibadan Disco; N19.92 billion for Eko Disco and N14.87 billion for Benin Disco this month.

In addition, Enugu Disco will receive N14.61 billion; Port Harcourt will get N13.45 billion; Kaduna gets N13.14 billion; Kano has N12.96 billion; Jos Disco is entitled to a subsidy of N11.68 billion while Yola Disco will get N8.06 billion this September subsidy circle.

“In line with the policy direction of the federal government on electricity subsidy, the allowed tariffs for Bands B-E customer categories shall remain frozen at the rates payable since December 2022 subject to further policy direction by the government,” NERC stated.