The Nigerian Electricity Regulatory Commission (NERC) has slammed a fine of ₦3.10 billion on the Abuja Electricity Distribution Company (AEDC) and Ikeja Electric Distribution Company (IE) for overbilling their customers.
According to the electricity industry regulatory agency, the fine is based on non-compliance of the DisCos with the commission’s previous order on capping estimated billing for electricity consumers.
The penalty was contained in documented ‘Order NERC/2024/114’ issued the commission.
Giving a breakdown, NERC said AEDC was fined ₦1.69bn while IE was slammed with a fine of ₦1.41bn.
The fine is part of the commission’s September 2024 Supplementary Order, dated August 30 and signed by Vice Chairman, Musiliu Oseni, and Commissioner, Legal, Licensing and Compliance, Dafe Akpeneye, published on NERC’s website on Thursday.
After investigating AEDC’s billing practices, NERC identified that the company had overcharged customers from January to September 2023, leading to the imposition of the fine which is equivalent to 10 per cent of the overbilled amount.
The document outlined the reasons behind the fine and adjustments to AEDC’s revenue requirements and tariffs.
“Pursuant to the Commission’s order NERC/2024/04 on non-compliance with the capping of estimated billings, and subsequent petition hearings and data further provided by AEDC, the commission approved the deduction of N1.69bn from the total annual OpEx of AEDC effective September 2024, being 10 per cent of the overbilled amount by AEDC for the period covering January-September 2023.”
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“Pursuant to the Commission’s order NERC/2024/04 on non-compliance with the capping of estimated billings, and subsequent petition hearings and data further provided by AEDC, the commission approved the deduction of N1.41bn from the total annual OpEx of IE effective September 2024, being 10 per cent of the overbilled amount by IE for the period covering January-September 2023.”
In addition to the fine, NERC also issued directives aimed at improving service delivery and monitoring compliance with service-based tariffs.
AEDC, IE are required to ensure the continuous monitoring of its service levels, particularly regarding electricity supply to Band A feeders.
The Supplementary Order, which will remain in effect until a new tariff review is issued, underscores NERC’s commitment to ensuring that electricity distribution companies adhere to regulatory guidelines while protecting consumers from unfair billing practices.
“Where AEDC, IE fail to deliver on the committed level of service on a Band A feeder for consecutive two days, AEDC, IE shall on the next day by 10am publish on its website an explanation of the reasons for the failure,” the order specified.
The Supplementary Order also mandated AEDC, IE to procure a minimum of 61MW, 60MW of embedded generation, with at least 30MW sourced from renewable energy, to improve the reliability of electricity supply within its franchise area.
The procurement of this capacity must be completed by April 2025.
NERC also made provisions for compensating customers for service failures, particularly for those on Band A feeders.
“AEDC, IE shall make appropriate compensation to the affected customers in Band A feeders listed in Appendix 3 for failure to deliver up to 20 hours of average supply but more than 18 hours of average supply,” the order stated.
By: Babajide Okeowo
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