NERC to enforce compensation to electricity consumers for under-supply from July

The Nigerian Electricity Regulatory Commission (NERC) has moved to enforce compensation to electricity consumers for the under-supply of power to their homes and businesses with effect from July.

This follows several complaints by energy consumers that the Service-Based Tariff (SBT), which has led to a huge increase in electricity bills paid by customers, only places obligations on them without appropriate sanctions for Distribution Companies (DISCOs) that under-supply.

This was made known by the Deputy General Manager, Markets Competition and Rates, NERC, Mr Abba Terab, at the 58^th Session of the Power Dialogue organized by the Electricity Hub, who said that for now, compensation will be based on a 60-day cycle.

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Under the policy, customers are to pay for electricity in correlation with the level of service they get and how long they receive power daily. Therefore, it will be based on a minimum average hour of power supply and other metrics.

Consumers are divided into five bands A–E, where band A is for customers who get 20 hours of power and above daily; B is for customers who get power for 16 hours daily and C covers customers who enjoy power for 12 hours and above a day.

Also, D is for those that enjoy power for 8 hours and above, while band E is for customers who only get four hours and above but below 8 hours of power supply daily.

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What the NERC top official is saying

Terab said that as the process gets fully automated, the commission will migrate DISCOs to a monthly compensation arrangement adding that customers who do not get the expected quality and quantity of supply will be refunded and downgraded to a new band while there will be an attendant adjustment on their tariff levels.

He said in cases where the problem of lack of supply was not from the DISCOs, the Transmission Company of Nigeria (TCN) would be compelled to compensate the Discos with the same procedure for sanctions going for the Generation Companies (Gencos).

Terab, in his statement, said, “If I am in band A, I should get band A service and when I am paying for band A service and I don’t get band A service, but I get band B service, I should be compensated accordingly. That’s the position of the commission and it has been made very clear to all operators within the industry.

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We believe that by the time we carry out the minor review, this will be done. When the automation of the meters is done, compensation will be on a monthly basis. If over a period of six months a customer does not get minimum service, he will get a refund on a monthly basis for the energy.”

He added that towards implementing the penalty regime, the commission is already reviewing the data and at the end of the period before the minor review is concluded, appropriate compensation for customers will be passed on to the defaulting entity.

“But subsequently, as we fully automate some of the distribution of transformers, because feeders might still be on even when at their level customers don’t have supply, when this is fully automated, it will be done on a monthly basis continually from July onwards,” he said.

He stated that the industry was on the right track on the service-based tariff policy, which is being accelerated by the installation of meters nationwide, adding that because of the implementation of the policy, more energy is being delivered

He said, “So, some of the generators are operating at an optimal level and are now being pushed to their limits and that’s why some of them (power systems) are failing, maybe because of limitation in gas supply.’’

In case you missed it

It can be recalled that in October 2020, NERC warned power distribution companies (DISCOs) that they will compensate affected consumers for defaulting in service delivery if they fail to supply the required quantum of electricity under the new service reflective tariff regime as the commission had deployed a mechanism to monitor the Discos.

The commission said that it is expected to start monitoring the DISCOs on a monthly basis to ensure compliance by the power firms in terms of meeting the agreement.