Consumers cry out as Discos increase tariff by 33 per cent
More Nigerians have continued to raise the alarm over plans by Eko and Ikeja Electric distribution companies (DISCOs) to increase tariff by 33 percent, arguing that it will only inflict more pain on their injuries, as they were paying for services not rendered.
Speaking during the two-day public hearing organised by the Nigerian Electricity Regulatory Commission (NERC) on the extraordinary tariff review application by both distributors, they told The Guardian that the hike was a way of overtaxing and extorting more from poor Nigerians, who were yet to feel any positive impact from the previous hike.
Mr. Patrick Chukwuma said, “I would advice that they first show us what has been achieved since the previous increment. A scorecard or report would be necessary to convince the people that the newly proposed increment is being done in good faith. Let them focus on ensuring prepaid billing becomes the standard across homes and businesses thereby doing away with estimated billing in its totality.”
Goddie Ofose of 789 Marketing lamented, “It is totally unfair and unnecessary. Discos have been under performing and ineffective to say the least. Still 55 percent of the rural communities are still without electricity. Even in the urban region, electricity has been epileptic to say the least. The least thing to think about at this time is tariff increment.”
The Director General of the Federal Competition and Consumer Protection Commission (FCCPC), Babatunde Irukera, said the Discos have failed on the mutual agreement to assign metres to all Nigerians and increasing tariffs means increasing burden of a broken inefficiency by the service providers on the consumer.
He added that the DISCos need to address the issues of metreing, estimated ‘crazy’ billings, which were major concerns of the customers rather than focusing on the low revenue they are generating.
According to the DG, “When more people are metred, you will generate more money, when energy theft is stopped your revenue will increase and when people get steady supply of light they will be happy to pay.
“Consumers are not resisting paying a fair price. We do not receive complaints that the bill is high, they complain that they do not get light and yet they are billed. Asking them to pay for what they do not get is wrong. There is no law that justifies making people pay for what they do not receive.” He urged NERC to constitute a framework that would protect consumers.
Also, chairman of the public hearing, Commissioner, Finance and Management Services, NERC, Nathan Rogers Shatti said that the commission, recently, set up a cap to protect consumers from crazy billing by the distributors, when it instructed the distribution companies not to charge the consumers beyond the cap set.
Shatti said with the current metering gap of over five million consumers, the cap measure was imperative.He pointed out that though, as regulators, setting tariff was easy, but the commission could not do so without getting the contributions of the general public and stakeholders, hence, the need for the hearing, where, “The discos would present their application to Nigerians, the stakeholders and consumers can ask of the benefit from the proposed investment.
“As regulators, we will harvest all the contributions from all sides and review before arriving at a decision on the application of the DISCOs. Due to the issues around estimated billing, which consumers tagged crazy billing, the commission agreed that the billings are not done properly.
He further noted that this would not solve the metering issue, but that it was a transitional measure to fasten the process.He said, “We know that having metres is important for the industry, it is a revenue protection for the service provider and it is good for the consumer. But while we are working on ensuring Nigerians get these meters, we came up with this capping to ensure that there will be no more estimated crazy billing. This means that, every consumer must not pay above what his/her neighbour who has a meter pays. This has taken effect and the distributors have the next two years to meter all Nigerians. Pending when this is achieved, we will ensure that Nigerians are not exploited.”
Meanwhile, the electricity distribution companies, declared that they have not received any subsidy from the Federal Government since the power sector privatised in November 2013.
The 11 DISCOs operating under the aegis of Association Nigerian Electricity Distributors, ANED, in a statement through the Executive Director, Research and Advocacy, Mr. Sunday Oduntan, that none of the companies ever received subsidy from the government.
According to Oduntan, “To date, the DISCOs have not received any subsidy from the federal government. References to the N1.7 trillion in subsidies paid by the government are associated with payments that have been made to the generating and gas supply companies, under the Payment Assurance Guarantees, PAG, initiative and the Nigerian Electricity Market Stabilization Fund, NEMSF.
“As a matter of fact, NERC’s December 2019 Minor Review Order specifies federal government debt to the DISCOs, correspondingly, the rest of the NESI value chain), due to tariff shortfalls, of N1.728 trillion. DISCO’s liability to NESI, due to market shortfalls, is N81 billion.
“Significantly, government Ministries, Departments and Agencies (MDA) owe the DISCOs in excess of N100 billion, for energy consumed but not paid for – a federal government commitment, yet again, unmet under the privatisation agreement and MYTO-2015.”
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