April 7, (THEWILL)- Following the April 3, 2024 electricity tariff increase announced by the Nigerian Electricity Regulatory Commission (NERC), the Distribution Companies (DisCos) have instantly adjusted their billing template to reflect the new tariff. Consequently, electricity consumers will pay about 300 percent more for each kilowatt per hour of electricity than before.
The Vice Chairman of the Nigerian Electricity Regulatory Commission (NERC), Musliu Oseni, who disclosed the new tariff regime at a press briefing in Abuja on Wednesday, had said the increase would see the customers paying N225 instead of the current N66 kilowatt per hour.
According to Oseni, customers in Band A represent 15 percent of the 12 million electricity customers in Nigeria.
Band A customers, according to NERC, are those that enjoy between 20 and 24 hours of electricity power supply daily. Those in Band B have power supply between 16 and 20 hours, while the Band C customers are those who enjoy it between 12 and 16 hour
Reactions from across the states showed that the so-called Band A consumers hardly enjoy up to 20-24 hours of electricity power supply daily. A look at the list released by the Ikeja Electricity Distribution Company, showed that many of the Band A consumers experience more darkness daily than they enjoy power supply.
Investigation by THEWILL revealed that consumers in the Egbeda/Akowonjo jurisdiction in Alimosho local government area, classified as Band A, have been more in darkness since December 2023.
A resident of the area who identified himself as Simon Adediran living on Shasha-Akowonjo Road said they have lived virtually in darkness since the year. His house falls under Business Unit No. 3 on the Ikeja Electric list as “Abule-Taylor (11-EkoroINJ-T1-Ekoro) in Akowonjo Business Unit enjoys 920KW/h”.
Mr Adediran showed a message from a neighbour who visited the Business Unit earlier in the year to ascertain the cause of the perpetually poor power supply. The message read:
“I visited the Ikeja Electric sub-office, covering our area, at Onigbinde Street, Egbeda, today The visit was in connection with the prolonged deteriorating power supply in our area.
“One Mr Ernest, a member of staff, explained that the situation stems from a fault in the transformer feeder at the Alimosho Power sub-station {Gowon Estate) serving our area and the larger Alimosho.
“He further said the equipment had since been taken away for repair, but cannot say precisely when the repair will be concluded. He, however, expressed optimism that the repair could be done before the end of the first quarter (March) because it’s outsourced.
“He confirmed we had power supply for about four hours this morning (and that could be all for the day).”
Over three months after, the situation remained the same. In a message to its customers on April 2, 2024, Ikeja Electric apologised for the prolonged power deterioration and offered explanation:
“Dear Esteemed Customer,
The current service disruption you are encountering is as a result of significant load restrictions across many of our transmission load centres, particularly impacting: Oworo TS, Maryland TS, ltire TS, lsolo TS, Ogba TS, Alausa TS, Ejigbo TS, Alimosho TS, llupeju TS, Ayobo TS.
“We apologise for any inconvenience caused. We are actively collaborating with relevant stakeholders to restore normal operations.
Signed, Management.”
All the service points visited in the Egbeda/Akowonjo area confirmed that the new tariff now reflects in their service template.. Even the distribution companies (DisCos) notorious for extremely poor service, such as Enugu and Benin have already adjusted their tariff template while they continue to supply more darkness than light.
The tariff hike followed the removal of subsidy on electricity by the Federal Government as advised by the World Bank and the International Monetary Fund (IMF) who insisted that the subsidy on petrol and electricity must be phased out to free capital for other development priorities.
Some economic and industry experts have warned that hiking the price of electricity in less than a year of subsidy removal on petrol, will push many businesses into extinction because of inflation and high cost of operation. They also observed that the DisCos have not been fair in their dealings with their consumers as they introduce different tricks to exploit their customers. This includes the notorious estimated billing system.
For instance, the Abuja Electric Distribution Company (AEDC) in a statement posted on its X handle on Thursday, apologised to its customers over the wrongful billing of the new tariff rate.
AEDC explained that some Band A customers were wrongfully charged when recharging their meters, while former Band A customers who had been downgraded to Band B were charged the new tariffs of N225 per kilowatt hour. NERC has announced a sanction against AEDC for the action.
THEWILL reports that the DisCos) rake in enormous revenue from poor services, while their estimated-billing customers continue to groan.
The Nigeria Electricity Report by the National Bureau of Statistics (NBS) for Q3 2023 revealed that the number of estimated-billing customers of the 11 DisCos increased to 6.03 million from 5.9 million year-on-year.
The report stated that “estimated customers during the quarter were 6.03 million, higher by 0.53 per cent from 6.00 million in Q2 2023. On a year-on-year basis, estimated customers increased by 2.02 per cent in Q3 2023 from 5.91 million in Q3 2022”.
Estimated billing is a system of arbitrary charging against unmetered electricity consumers for electricity (energy) they did not actually consume. The billing is based on perceived pattern of consumption, or on the ‘best of judgement’, with unjustified high revenue targets as the motive
Consumers in this system are mandated to pay far above what they consumed on a monthly basis and the charges are usually outrageous.
“It is a system that thrives on corruption and is driven by tardy inclination to exploitation which defines a commodity in the category of monopoly,” said Gabriel Madu, an electrical installations contractor.
Last February, NERC issued a fine of N10.5 billion to be paid by all 11 DisCos) for their non-compliance with the mandated capping of estimated billing for unmetered customers across the country.
Amid poor power supply arising from frequent system collapse and shortage of gas supply to the generating companies (GenCos), the DisCos have continued to feed fat on poor consumers through arbitrarily high bills for services not rendered.
Members of organised labour have joined in condemning the recent hike in electricity tariff. Groups, including the Petroleum and Natural Gas Senior Staff Associations of Nigeria, civil society organisations and the Nigeria Electricity Consumer Advocacy Network, have warned that the hike would worsen the plight of Nigerians.
However, there are strong indications that many states are taking advantage of the new Electricity Act to establish their electricity generation firms, while the 188-megawatt Geometric Power Plant located in Aba, Abia State was commissioned by Vice-President, Kashim Shettima, on last February. .
Nigeria has the lowest access to electricity globally, with about 92 million persons out of the country’s 200 million population lacking access to power, according to the Energy Progress Report 2022 released by Tracking SDG 7.
The report, produced in conjunction with the International Energy Agency, International Renewable Energy Agency, United Nations Statistics Division, the World Bank and the World Health Organisation, indicated that Nigeria was followed by the Democratic Republic of Congo’s 72 million, Ethiopia’s 56 million and Pakistan’s 54 million access deficits.
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
