The Suspension Of Estimated Billing

The Nigerian Electricity Regulatory Commission (NERC) recently directed the 11 electricity distribution companies (Discos) to stop further collection of electricity bill under the estimated billing system. The regulatory agency has therefore placed limits on estimated bills that can be issued by Discos to unmetered customers. This is good news to consumers who have been inundated with estimated bills. If the order is strictly enforced, it is likely to be a game changer in the beleaguered power sector.

The directive entitled, “Order on the Capping of Estimated Bills in the Nigerian Electricity Supply Industry (NESI),” took effect from February 20, 2020. The order repealed the Estimated Billing Methodology Regulations 2012 as a basis for computing the consumption of unmetered customers by the Discos.

NERC also ordered that henceforth, all unmetered R2 and C1 customers should not be invoiced for the consumption of energy beyond the cap stipulated by it. In addition, Discos should ensure that all customers on tariff class A1 in their franchise areas are properly identified and metered not later than April 30, 2020. It pointed out that customers would not be liable to pay any estimated bill issued if the Disco failed to supply meters. However, apart from R2 and C1 customers, all other customers on higher tariff classes must be metered under the framework of Meter Asset Provider (MAP) regulation or any other financing arrangement approved by the commission.

Also, the agency explained that customers whose current estimated bills are lower than the prescribed energy cap should remain so without any upward adjustment until a meter is installed by the Disco. But, it warns that customers, who reject the installation of a meter on their premises by a Disco, will not be entitled to electricity supply, and therefore, will be disconnected. Such customers will only be reconnected with the network with the installation of a meter.

We welcome the new policy abolishing estimated billing and hope that it will bring sanity to the troubled sector, which has witnessed many operational hiccups since the privatisation of the power sector. The management of NERC has done well by issuing this latest directive to the Discos and we urge them to obey the new order. Doing so will enable them deliver seamless service to electricity consumers.

To address the power sector challenge, there is need to close the metering gap, which is put at five million. We recall that NERC had last year put in place measures to accelerate metering through the establishment of MAP. The agency also established Customer Complaints Offices in 25 states of the federation to quickly attend to customers over increasing complaints, and assured that it will not tolerate exorbitant charges for electricity consumed or not.  Despite the assurance, estimated billing by Discos persisted. Available data shows that the metering gap in the country remains high at about five million, compared to the total customer size of about nine million. This represents about 58 per cent deficit in metering.

It was in a bid to solve the problem of estimated billing that in 2018, the House of Representatives conducted a public hearing on a bill sponsored by the then Majority Leader, Femi Gbajabiamila, to criminalise estimated billing by Discos. It came on the heels of numerous complaints by consumers that they were being extorted by the Discos. Our position aligns with the directive by NERC that consumers need to be protected from the high-handedness of the electricity providers.

We believe that the provision of prepaid meters will make energy consumers to effectively manage their consumption. To eradicate estimated billing, there should be massive provision of prepaid meters. Last year, NERC estimated that electricity consumers should pay between N36, 991 and N67, 055 for installation and maintenance of the meters. We believe that if consumers are provided with prepaid meters, they will pay for the tariff without being prompted to do so.  Apart from meeting the metering needs of electricity consumers, there is urgent need to improve the power supply in the country. Many firms have either closed down or relocated to other West African countries as a result of unstable power supply. Some firms run on generators, thereby increasing the cost of production, which they pass to consumers.

Therefore, the government and electricity distribution companies should strive to meet the country’s power needs. Currently, the national energy requirement is between 40, 000MW and 60, 000 MW, while generation is less than 5, 000MW. The Discos should show more commitment to meeting the power needs of consumers instead of hiking tariffs.