NERC contemplates reversal of fixed charge policy

The Nigerian Electricity Regulatory Commission said it might reverse the order on non-payment of N750 monthly fixed charge by electricity consumers in areas without power supply.
The NERC Chairman, Dr. Sam Amadi, gave the indication on Tuesday in Abuja at a public hearing organised by the commission to review the conditions for the payment of fixed charge by electricity consumers.
NERC had on May 1 ordered electricity Distribution Companies to stop collecting the N750 monthly fixed charge in any area without power supply for 15 days in a month.
It said: “This is a way of making the DISCOs more responsive to the plight of consumers.
“The fixed charge is an essential part of customer’s monthly bill designed to allow the DISCOs to recoup and maintain costs on permanent investments such as transformers, cables and poles.”
Amadi said the barrage of complaints from DISCOs on revenue loss due to the policy had led NERC to convene the public hearing to address some of the challenges in the implementation.
He said: “Some DISCOs have raised concerns to this order and its implementation.
“As such, the commission deems it to be of significant interest to the general public, requiring a hearing under Section 47 of the Electric Power Sector Reform Act 2005.
“It is one of the principal objects of NERC under section 32 (f) EPSR Act 2005 to ensure that regulation is fair and balanced for licensees, consumers, investors and other stakeholders.”
The NERC boss said that as a regulator, it was out to ensure that consumers were not shortchanged and at the same time not running the DISCOs out of business.
Earlier, Abimbola Odubiyi, the Executive Director of Regulatory and Stakeholders Affairs, Abuja DISCO, urged NERC to reverse the policy.
Odubiyi said: “This is to ensure that customers continued to pay the fixed charge regardless of the availability of power supply as this fixed charged is crucial to run the companies.”
He said the law also seemed to single out the DISCOs for punishment for power outages while the Generation Companies and Transmission Company are left off the hook.
Ernest Oji, a Director of Eko DISCO, faulted the policy, insisting that DISCOs did not have automated and statistical meters to determine the number of days in a month where consumers were not supplied electricity.
Oji said the law was not implementable because it would lead to chaos in the sector.
Oji suggested the retention of the fixed charge, while the service charge would be applied on the basis of availability of power supply.
He said: “This law is very difficult to implement.
“In fact, it will create a lot of chaos since we don’t have means of measuring.
“We need to withdraw this structure and come up with a new structure that ensures a win win situation.”
The occasion was attended by officials from the Nigerian Bulk Electricity Traders and the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture.
Others were Manufacturers Association of Nigeria, the Consumer Protection Council and other stakeholders in the supply chain.