Discos fault NERC’s condition for fixed charge collection

No Comments » July 23rd, 2014 posted by // Categories: Energy Development Project




Discos fault NERC’s condition for fixed charge collection


Owners of the privatised electricity distribution companies have faulted the condition recently introduced by the Nigerian Electricity Regulatory Commission that they must not collect fixed charges from customers who did not get power supply for 15 days in a month.

NERC had in April announced that beginning from May 1, 2014, consumers who did not receive supply for more than 15 days either cumulatively or continuously would not pay the fixed charge for that month.

The directive by the commission was, however, contested by the Discos in Abuja on Tuesday during a public hearing organised by NERC on an order to revise the payment of the fixed charge component of the Multi Year Tariff Order.

The Assistant General Manager, Regulatory Affairs, Enugu Electricity Distribution Company, Mr. Reuben Okoye, argued that the order was made without due consultation with the operators.

He said outages were not caused solely by the Discos, adding that some of the issues that necessitated power failures across the country were as a result of transmission and generation bottlenecks.

Okoye said the penalty for outages should not be borne completely by the Discos but should be spread across the power value chain, and stressed that it was difficult to independently determine customers who experienced outages in a given period.

The Director, Eko Electricity Distribution Company, Mr. Ernest Orji, said the rule was difficult to implement as the Discos had yet to acquire statistical meters to determine such claims from consumers.

“In our submission, we argue that there should be a new structure for service charge and not fixed charge so that a percentage of supply is given as compensation to consumers or exempt them from paying the service charge for that period,” he said.

Mr. Abimbola Odubiyi of the Abuja Electricity Distribution Company argued that the order would encourage power consumers not to pay their bills.

He urged NERC to review the order so as to ensure the sustenance of the market’s financial progress, adding that the rule should be extended to the Transmission Company of Nigeria, the power generation companies and gas suppliers in the case of similar defaults.

In his address, the National Vice President, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, Mr. Sanusi Maijama’a, said, “If one million consumers pay the N750 fixed charge monthly, then they are paying N750bn to the Discos for doing nothing. I have said that if there is efficient service and every consumer pays his bill, the government can generate much revenue from power than the oil sector.”

A representative of the Manufacturers Association of Nigeria, Mr. Okpe Adejoh, argued that the 15-day outage penalty period was not enough, as a day of outage meant huge losses for manufacturers.

He suggested that the Discos should consult with generation companies and the TCN to share the penalty on the fixed charge.

Reacting to the arguments, the Chairman/Chief Executive Officer, NERC, Dr. Sam Amadi, said the commission would consider the submissions and summarise them into expunging the order, keeping it, and/or revisingit, in order to ensure clarity.


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