Consumers Shouldn’t Pay For Transformers, Meters, Senate Tells NERC


The Senate, on Tuesday, directed the Nigerian Electricity Regulatory Commission (NERC) to mandate electricity distribution companies (DISCOs) in the country to discontinue the practice of making consumers pay for meters, poles and transformers.

These, which by law, the Senators noted, are properties of the DISCOs, adding that where the consumers purchase those items, they should give notice of the purchase to the DISCOs, and be entitled to recover their expenses from subsequent consumption of electricity.

The upper chamber, also ordered the commission to put an immediate end to the Fixed Charge (FC) of N702.00, being collected from electricity consumers nationwide by the DISCOs.

The motion is coming almost three weeks after the ruling of Justice Mohammed Idris of the Federal High Court in Lagos stopped the plan by NERC to hike electricity tariffs in the country.

In what may also be an indication an indication that it is aware of the abuse of the fixed charge, the NERC had on June 2, begun the process of capping the revenues that DISCOs can generate from customers through the estimated billing method.

NERC had noted at a consultative session in Abuja, disclosed its intention to take away whatever incentives drive DISCOs to continually ignore extant plans to provide prepaid meters to customers in their networks.

It said by this, Discos had resorted to habitually billing unmetered customers, albeit unfairly, in most cases through the estimated billing methodology it initiated in the past to primarily address the sector’s shortfall in metering of customers and revenue generation. NERC said DISCOs had been found guilty of abusing the methodology, hence its decision to cap the revenues accruable to them from the methodology.

Alarmed by the increasing complaints of electricity consumers on the shoddy practices of the NERC in its arbitrary charges, the Senate, on Tuesday, also observed that a consumer has the right to part of or not the bulk-metering scheme introduced by the electricity Distribution Companies (DISCOs).

Based on its findings on the complaints of the general public on the activities of the DISCOs, the Red Chamber, therefore, directed the NERC to ask the operators to discontinue the practice of compulsory bulk-metering of villages and communities in the rural areas.

The upper chamber also urged the NERC to inquire into the numerous complaints before it by consumers in line with the provisions of Section 74(1)(b) of the PSRA; calling on the commission and the Consumer Protection Council (CPC) to sensitise electricity consumers on the remedies available in the event of inefficient services by the DISCOs.

These were the resolutions from a motion entitled: “Unfair Trade Practices of Electricity Distribution Companies in Nigeria,” which was sponsored by the duo of Senator Sam Egwu and co-sponsored by Senator David Umaru.

Speaking on the motion, Egwu noted that Nigerians have been short-changed by the DISCOs, arguing that  the companies, “since the takeover of their operations, have been ripping off consumers through (the) Fixed Charges and bulk metering across the country. Some areas in the country are still billed through the estimated billing system, which doesn’t make provisions for payment of only electricity that is consumed, even though bills are dished out without commensurate services being offered by the distribution companies.

“Despite all efforts by the government, however, there has been constant level of arbitrariness, whereby electricity consumers are charged extortionate rates, fixed rate, based on the use of the billed meters installed by the then Power Holding Company of Nigeria (PHCN).

“With the present economic situation in Nigeria, a lot of Nigerians (particularly the downtrodden) would not be able to access one of the very basic needs of life (electricity). This billing system is also capable of ruining the economic power of most small-scale business that requires electricity to function.

“Even those (Nigerians) that have this prepaid meters are being billed a fixed rate of about N700 per month on this meters (whether or not they consume electricity). What is the purpose of this fixed rate? Why is this so? What is the rationale behind it?

“By the avalanche of complaints by electricity consumers about the unwholesome practice of the Discos, which fall short of standards established by the NERC and do not also meet up to global best practices, thereby failing in the discharge of their contractual obligations to the Nigerian public,” he added.

Egwu blamed arbitrary electricity billing by the DISCOs on the fact that they are struggling to meet a pre-determined target.

Supporting the motion, Senator Mohammed Salami, lamented that the essence of handing over the electricity sector to the private sector has been defeated, as “(electricity) bills are given based on mere looking at the owner of the meter.”

In his contribution, Senator Danjuma Goje, however, noted that the motion alone cannot solve the electricity problems, calling for an investigation of the entire privatisation with a view to holistically solving the electricity problems.

“Talking about the DISCOs alone cannot solve the problems of electricity in this country. We need to look at the entire privatisation of (the defunct Power Holding Company of Nigeria), which includes more than the Discos,” he said.

Also, Senator Ben Bruce, who described the situation as a big scam, accused the government of being guilty as well.

“This is the biggest fraud I have ever seen. This process must be investigated. The Federal Government is as guilty as those, who are distorting us,” he claimed.

Also contributing in favour of the motion, Senator Nelson Effiong called for a review of the Power Sector Reform Act (PSRA), which “(would help us) see where the lacuna lies. The Senate should also review and see how it can amend the Act for the benefits of Nigerians.”

Senator Chuka Utazi pointed out that electricity is very important for any economy to make any serious impact.

“But this is different in the case of Nigeria because our electricity is in tartars. The unbundling of the PHCN has not given Nigerians the relief they need,” he added.

For Senator Francis Alimikhena, who observed that the activities of the DISCOs would kill the poor people of Nigeria, if they are not checked, alleged that some DISCOs are not qualified for the jobs they are doing in Nigeria.

In his remarks, the Senate President, Senator Abubakar Saraki said: “This is a very, very important topic. The people have not seen any benefits from this privatisation exercise. If they need to be reversed, they must be reversed in the interests of Nigerians. The period of impunity is over.”


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