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NERC gives Discos condition for fixed charge collection

By BusinessNews Staff on May 2, 2014

Beginning from today (Thursday), electricity distribution companies nationwide must stop collecting fixed charges from consumers who do not get power supply for 15 days, the Nigerian Electricity Regulatory Commission has ordered.

The NERC said it had resolved that consumers who did not receive supply for more than 15 days either cumulatively or continuously would not pay the fixed charge for that month.

The Chairman, NERC, Dr. Sam Amadi, gave the directive while addressing journalists at the commission’s headquarters in Abuja on Wednesday.

He explained that the directive would take effect if it was due to equipment failure, including transformer breakdown, but would not be applicable if the outage was due to disconnection, non-payment of bills, or any issue caused by the consumer.

Amadi said, “While the commission has determined that the fixed charge remains an essential component of the bill, it has, however, reviewed the continued retention of the fixed charge component in the tariff and payment of fixed charge in the light of consumer complaints, particularly with regard to continued payment of fixed charge even when the energy is not delivered to the consumer.

“Upon due consideration of these complaints by the consumers, and considering the role of NERC in the Nigerian electricity supply industry; the commission, as provided under Section 32 (d) and 32 (f) of the EPSR Act, 2005, hereby orders that effective May 1, 2014, where any customer of a distribution licensee has not received electricity supply for a period of 15 days in a month, such a customer shall not be required to pay the fixed charge.”

He said there had been several complaints from consumers over the fairness or legality of the monthly fixed charges.

This, he said, prompted the commission to embark on an independent investigation that led to the directive that the Discos should halt the fixed charges after 15 days of no power supply.

“There have been a lot of comments from consumers about the fixed charge and the concern is whether it is fair and legal,” Amadi said.

He said the fixed charge was a universal practice and a key element in electricity, but that did not mean it would not change in any tariff year.

The NERC boss explained that the fixed charge might change from one tariff year to another, but would not change irrespective of what a customer consumed.

The NERC boss said while the energy charge covered actual cost of energy consumed, the fixed charge covered investments made in permanent power equipment such as poles, cables and transformers as well as their maintenance cost and the capacity charge paid to the generating companies.

The Commissioner, Government and Consumer Affairs Division, NERC, Dr. Abba Ibrahim, urged consumers who had such cases to report to the commission’s forum office for redress.

He, however, stated that the Discos had been mandated to check such outages and forfeit the fixed charges for problematic months to the affected consumers.

[Punch]

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