NERC clarifies controversy on fixed charge paid by electricity consumers

THE Nigerian Electricity Regulatory Commission (NERC) has said the next tariff adjustment will see the monthly Fixed Charges (FC) paid only by consumers for electricity supplied as against the usual practice where consumers pay even if they are not supplied.

Chairman of the Commission, Sam Amadi, in response to a query from the Senate about the fixed charges and other issues, revealed at a press briefing yesterday in Abuja that it has become a concern due to protracted blackouts and inconsistent power supply, despite constant billing of consumers.

He added that it is not tied to consumption and it is not peculiar to Nigeria as other countries refer to it as ‘daily supply’, ‘service’, or ‘property’ charge. He, however, said the decision would stay.

While a Residential Consumer (R2) under Abuja Distribution company (Disco) pay N702 Fixed Charge monthly, Commercial (C2) pay N47,772 and Industrial (D2) pay N25,678. Within the said 2015 tariff plan, the 14 consumer classes pay about N609,624 monthly as Fixed Charged under the Abuja Disco which is one among the 11 Discos.

But Dr. Amadi in his clarification yesterday said, “the Fixed Charges that consumers pay in the Nigerian electricity market is not illegal or fraudulent. The difference could be that we don’t have a good supply of electricity because of the legacy problem of lack of generation capacity.”

He said consumers often lament in paying the FC component for epileptic or no power supply and that the Commission has closed in on avenues of initiating a proportional payment for electricity consumption. “The Discos have agreed to restructure the Fixed Charges such that a customer who does not receive electricity supply does not pay Fixed Charge.

This remodeling of the FC will be part of the ongoing tariff review process,” Amadi said. It was reported in the media that the Senate had directed NERC to review the electricity Multi-Year Tariff Order 2 (MYTO) with a view to abolishing the Fixed Charge.

The Discos’ group, the Association of Nigerian Electricity Distributors (ANED) said removing the charge could crash the infant power sector as it was not a fraud.