12 July 2012

Nigeria: Electricity Commission Finalizes Estimated Billing Framework

The Nigerian Electricity Regulatory Commission (NERC) yesterday held a consultation workshop with electricity consumers as a final step to the adoption of a standard and unified method of estimated electricity billing for consumers without meters.

A draft of conditions of meter connection fees was also discussed to get public input at the forum held in Abuja.

On June 1, the commission announced a hike in electricity tariff and made the supply of meters to customers free by the distribution companies. The cost of meter was factored into the new tariff.

Speaking at the event, chairman of the commission, Dr. Sam Amadi, said it has developed a framework for estimated billing and had it placed in its website for public input as well as staging the consultation to get further input to improve on its quality.

He said the connection fee for a meter was to be determined by the cost of wires, fuse and other auxiliary items needed for the connection of a meter.

Amadi said: "We have asked the Distribution Companies (DISCOs) to do three independent market surveys to establish the cost of those items. If you go to Benin and say this is the cost of copper wire, we can then say something like 'in Benin' the connection fee is N8,000.

"The DISCOs have to justify the cost to us. The price will be based on real price in real market and not fiction determined by the regulator but the market. So, when the market changes, the cost changes too. Our focus as regulator is clarity and transparency publicly established. It is very scientific and mathematical. It is open for public challenge."

The NERC chairman further said there was no going back on the 18 months timeline set for the metering of all customers by the distribution companies, arguing that in the meantime, unmetered electricity consumers needed to be protected from "reckless billing" which called for the framework for estimated billing.

This is necessary to "avoid extortion and exploitation by both utility companies and customers," he said.

Based on the new criterion discussed, customers will be given estimated bills for a limited period of three months, after which the distribution company is required to provide the customers with meters to ensure they are only paying for what they consume.

In the same vein, the connection fee methodology will circumvent the reported practice of the distribution companies charging customers unnecessary and excessive fees for connecting to electricity services. The proposed methodology details the connection components which will determine the associated fees payable by the customer, where applicable.

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