The DisCos have it coming. Consumers will heave a sigh of relief. But the April 30 deadline is open to debate
Reacting to incessant and vehement complaints by the majority of electricity consumers, that the bills they are charged by the electricity Distribution Companies (DisCos) do not reflect the power they are supplied, the National Electricity Regulatory Commission (NERC) has moved to eliminate the estimated billing system.
The DisCos resort to estimated billing for a substantial number of consumers because over 52%, of the over 10 million electricity users, have reportedly not been metered,, thus making it impossible to have accurate billing based on actual power consumed.
Consequently, the NERC has given the DisCos an April 30 deadline to meter different categories of customers, insisting that customers who remain unmetered at the expiration of the deadline will no longer pay estimated bills, even as they must remain connected to the power supply grid. In the transition period, the commission has put a cap on the amount that electricity consumers can be charged through estimated billing. Thus, customers now have an energy cap of 78Kwhr per month and a tariff of N24 per hour, which comes to N1,872 per month. Those who consume less than 50Kw will be billed at N4 per Kw/hr and a maximum of N200 monthly.
Many customers have understandably received the news of the NERC’s decision with skepticism because this is not the first time that the DisCos will be given deadlines within which to provide meters for all electricity consumers with no tangible result. But for the inexplicable tardiness of the regulatory authorities, it is difficult to understand why the DisCos have been unable to provide meters to consumers, over five years, after the privatization process that saw them acquiring majority shares in the companies from government.
Effective metering, that enables accurate and scientific measuring of power consumption on which billing is based, is at the very heart of the privatization of the power sector. With privatization, the DisCos are expected to demonstrate a higher degree of transparency, accountability and efficiency than previously obtained in the sector.
Of course, it is important to take into account the arguments put up by the DisCos in self-defence. They contend that electricity still remains substantially subsidized; and that bills charged consumers do not reflect market realities. Even then, they argue, about 70% of customers fail to pay their bills; while a substantial part of the revenue they are able to collect is invested back into the value chain, through payment for transmission and generation of electricity, as well as statutory dues to the regulator.
Thus, they insist on increase in the current electricity tariff to reflect the rate of inflation, exchange rate as well as the cost of natural gas, including the cost of transporting the commodity by generating companies. The NERC, which had earlier announced an impending hike in electricity bills, has reportedly suspended the move in the aftermath of public hearings organized with stakeholders nationwide by the various DisCos. The Commission’s Chairman, Professor James Momoh, said the proposed increase in electricity tariff will come into effect only after the DisCos, consumers and government arrive at a compromise.
Consumers rightly insist that they will be willing to pay for actual power supplied and consumed; and that any hike in tariff must be a function of marked improvement in the power supply situation. The DisCos on the other hand argue that only an increase in tariff will guarantee sufficient power supply, metering and the necessary massive investment in the network to achieve improved service delivery to customers. The NERC needs dexterity to navigate a tricky terrain.
There is no doubt that speedy metering of customers will significantly increase the number of those willing to pay for efficiently computed bills and help improve the revenue position of the DisCos. The DisCos must not give the impression that they profit from the arbitrary estimated billing arising from non-provision of meters. This is why they must consider metering of all consumers an urgent priority.