NERC’s crackdown on DisCos is a win for consumers

Efficiency, integrity, transparency, and the enforcement of regulations form the bedrock of a functional society. They create an atmosphere of trust, a sense of belonging, and confidence that progress is achievable. Where these principles are absent, cracks begin to form, eroding public confidence and leaving citizens disillusioned. The Nigerian Electricity Regulatory Commission’s (NERC) latest action offers hope that this path of decay need not be inevitable.

Last week, NERC imposed a hefty ₦200 million fine on the Abuja Electricity Distribution Plc (AEDC) for flouting regulatory directives on tariff billing. The commission found that AEDC had been applying the new electricity tariff indiscriminately across all customer bands, disregarding its explicit directives on customer classification. Describing this as a “flagrant breach,” NERC moved swiftly, mandating corrective measures to protect consumers.

The electricity distributor has been ordered to reimburse customers in Bands B, C, D, and E who were billed above their approved tariff categories. These customers are also entitled to receive token refunds, reflecting the energy they would have purchased at the correct rates. The reimbursements are to be completed by 11 April 2024, while AEDC must provide proof of compliance by 12 April. Failure to meet this deadline, NERC warned, could attract additional sanctions.

This decisive action underscores NERC’s role as a regulator willing to stand firmly on the side of fairness. The Commission has further directed electricity providers to stop billing disconnected customers until reconnection, as part of its effort to ensure transparency in billing practices.

NERC’s enforcement drive has not been limited to AEDC. Earlier this year, the regulator fined eight other Distribution Companies (DisCos) a total of ₦628 million for disregarding the capping of estimated billing for unmetered customers. These fines, amounting to 5 per cent of the gross overbilling during the review period, came with a directive that the DisCos issue credits to all overcharged customers.

The capping policy is a landmark intervention designed to protect unmetered customers from arbitrary billing. It pegs their charges to the average consumption of metered customers on the same feeder, a mechanism meant to encourage DisCos to speed up metering while shielding customers from exploitation.

The Federal Competition and Consumer Protection Commission (FCCPC) publicly commended NERC’s clampdown, describing it as consistent with its own mandate under Section 17(s) of the FCCPC Act 2018. The FCCPC said it would continue to support enforcement efforts to protect consumers from predatory practices and to demand restitution on their behalf.

In a statement, the FCCPC reaffirmed its commitment to ensuring a fairer deal for electricity consumers through complaint resolution platforms and consumer engagement forums nationwide. These initiatives have offered invaluable opportunities for Nigerians to air grievances directly to regulators and service providers, with many cases resolved on the spot.

There is no doubt that the power sector remains fraught with deep-seated challenges, including metering shortfalls, billing irregularities, and inadequate customer service. Yet, NERC’s willingness to enforce compliance sends a powerful signal to DisCos that exploitation will carry consequences. The regulator should consider expanding its enforcement toolkit, including heavier fines for repeat offenders and even licence revocation in extreme cases, to create a stronger deterrent effect.

Consumers who have suffered unjust treatment must also play their part by filing formal complaints with their DisCos and escalating unresolved matters to NERC or the FCCPC. In this digital age, technology should be leveraged more effectively to monitor consumption and billing, leaving less room for manipulation.

NERC’s renewed assertiveness is a welcome development. It reflects a regulatory culture that places the interests of citizens at its core. The Commission, with continued support from bodies like the FCCPC, has a real chance to restore trust in the power sector and lay the foundation for a fairer and more accountable electricity industry.