Residents in parts of Abuja who use prepaid meters have stated that they do not pay more for electricity consumption but pay bills more frequently because of the improved power supply.
Nairametrics spoke to some metered Nigerians about their experience with power bills following the improved power supply in the country.
Barr. Ejike Thompson, a resident of Nyanya, Abuja, says that in Q1 2022, when the power supply was abysmal, he recharged his meter once a month, compared to these days when he recharges up to three times a month at the rate of N2000.
“I wouldn’t say the rates have increased, I would rather say the frequency of recharge is more, either way, it’s a plus for NERC and others across the value chain,” Thompson told Nairametrics.
Victor Johnson, a resident of River Park Estate, Lugbe, Abuja, says that since 2021, he noticed slight reductions in the amount of units he receives when he recharges his meter at N20,000. According to him, he used to receive 300 units for said amount but not anymore.
“Apart from that, it appears the consumption rate is faster now than two years ago, for instance. It looks like the meters being installed now read faster than the older meters that were distributed years ago,” Johnson told Nairametrics.
Johnson’s experience is because there is a more frequent supply of electricity to him and so it is inevitable for his metre to ‘run faster’ than when he seldom got supply. It’s simple logic.
The experiences of Abuja residents are not different from other consumers of electricity around the country: They are getting more value for their money. This is due to the recently introduced billing system that ensures consumers get billed for what they consume rather than one based on estimates. Known as Serviced Based tariff (SBT), the system is based on hours of supply available to consumers.
What is Service-Based Tariff? (SBT)
Service-based tariffs are power supply costs based on a reflection of expenses across the power value chain. Consumers are charged based on the power they enjoy.
In a 2021 op-ed, Electricity Lawyer, Ivie Ehanmo wrote that the Service Based Tariff (SBT) program under NERC is an intervention to address the liquidity crisis in Nigeria’s power sector.
According to Ehanmo, the methodology under the SBT is based on hours of supply availability to various customer classes across the value chain, indicated by guaranteed levels of service by the electricity distribution companies (Discos) to end-users, following regular consultation processes and monitoring by NERC.
Service Based Tariffs (SBTs) took effect in 2020 when the Nigerian Electricity Regulatory Commission (NERC) directed Electricity Distribution Companies to commence the collection of SBTs across the country.
Under the service-based tariff program introduced by NERC which is subject to regular review, power consumers are classified from Band A to Band E.
What NERC told Nairametrics
- According to information from sources at the Nigerian Electricity Regulatory Commission (NERC), Nigerians are not expected to pay more for improved power supply.
- Nigerians can be assured of guaranteed stability of supply, as the cost of the additional generation and supply has been built into the current tariff, so they are not expected to pay more.
- An average of N2 has been added across bands on the SBT for the July Minor Review Order. However, the increase in supply was predicated on the partial activation of contracts and not on the minor review of tariffs.
- Funding for this is drawn largely from Government refunds of shortfalls and the provision of loans to guarantee long-term payment of invoices.
What you should know
In June 2022, Sanusi Garba, chairman of the Nigerian Electricity Regulatory Commission (NERC) announced that Nigerians would start experiencing increased power supply from July 1.
According to Garba, transmission and distribution stakeholders were well aware of their obligations and would meet the conditions required of them.
“We might not have 24/7 power supply from July 1 but Nigerians will see the trajectory because the target is to have an average of 5,000MW daily for transmission and distribution,” Garba stated.
In case you missed it
- Nairametrics had earlier reported that due to the introduction of the service-based tariffs, the Nigerian electricity sector, classified with gas, steam, and air conditioning supply recorded a 78.16% year-on-year real GDP growth in the second quarter of 2021.
- Nairametrics also reported that Nigeria’s power generation peaked at 5,043.4MW on Thursday, 1st September 2022, a significant improvement from the peak of 4,664.1MW recorded on Wednesday, 31st August 2022, which is the highest daily generation recorded.
- Based on available data from the Nigerian Electricity System Operator (NESO):
Energy Highlights for September 8, 2022
- Peak Generation – 4,451.10 Megawatts
- Off-peak Generation – 3,884.80 Megawatts
- Energy Generated – 101,926.22 Megawatt per hour
- Energy Sent Out – 100,597.81 Megawatt per hour
Glitches
A brief chat with residents around the Apo neighborhood in Abuja revealed that some residents are still not metered and their power bills are paid directly to the Power Holding Company of Nigeria (PHCN).
Mr. Tola Moshood told Nairametrics that his inability to get a prepaid meter for his home has led to estimated billing for over two years.
He attested to an improved power supply in his neighbourhood and stated that he currently pays N9,500 per month as his power bill. However, he notes that during the first quarter of the year, when power supply was less available, he paid N8000 per month.
Bottomline
Sources at NERC told Nairametrics that as customers are migrated into higher tariff bands, their tariff increases as well. This could be the reason for differences in unit rates experienced by some metered customers.
According to NERC sources, investments have been made by the distribution companies (Discos) to ensure that customers on lower tariffs have had improved supply above their minimum supply up to a period of three months. Then the Discos must write to NERC with evidence of improved supply before migration will be allowed.
So, if Band D customers are receiving an improved power supply of about 12 hours and above for up to three months, their Disco writes to NERC to migrate them to Band C, then they are required to pay the rates for Band C, not Band D.
