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NERC Unveils New Tariff Regime



The Nigerian Electricity Regulatory Commission (NERC) on Monday, unveiled a new increment of average of N9.00 electricity tariff , while abolishing the controversial fixed charge.

Henceforth, all electricity distribution companies are not to bill customers the fixed charge component, starting from the customers’ next round of billing, the regulator directed.

Fixed electricity charge is a component of the tariff consumers are made to pay monthly, separate from what they actually consume.

The controversial N750 fixed charge nationwide had generated intense controversy among consumers who described it as illegal.

The chairman of NERC, Sam Amadi, said that under the new tariff regime, electricity consumers would only pay for what they consume from month to month.

Amadi said the removal of the fixed charge component was in compliance with consumers’ demand for a just and fair pricing of electricity in the country.

In the new tariff regime, residential customer classification (R2) in Abuja Electricity Distribution Company will no longer pay N702.00 fixed charge every month. Their energy charge will increase by N9.60. Also, residential customers (R2 customers) in Eko and Ikeja electricity distribution areas will no longer pay N750. 00 fixed charges.

They will be getting N10 and N8 increase respectively in their energy charges. Similarly, the burden of N800.00 and N750.00 fixed charges would be lifted off the shoulders of Kaduna and Benin electricity consumers. These consumers will see an increase of N11.05 and N9.26 respectively in their energy charges.

The Commission added, “The new tariff is also good news for commercial consumers For example, commercial customers’ classification C2 in Ibadan and Enugu will no longer pay fixed charges of N17, 010. 00 and N22, 141. 00. Their energy charge will increase by N12.08 and N13.35 respectively.”

The outgoing Chairman of NERC, Sam Amadi, who unveiled the new tariff in a statement in Abuja, however, descended heavily on the recalcitrant DISCOs, hiding under estimated billing to rip off customers, warning that, “Henceforth every disco should meter all its customers.”

Amadi said, “The metering policy will be strictly enforced. For those willing electricity customers who paid for meters under the Cash Advance Payment Metering Initiative (CAPMI) but are yet to be metered within the allowable 60 days they would no longer be billed by the electricity distribution companies under the new tariff regime.

“The distributing companies (DISCOS) will not disconnect them. There is zero tolerance for over billing of customers. An unmetered customer who is disputing his estimated bill would not be expected to pay the disputed bill. He would pay his last undisputed bill as the contested bill go through the dispute resolution process. This is a departure from the old practice which prescribes that customers should first settle the bill while dispute resolution is in process.”

Amadi who said the new electricity tariff regime was approved over the weekend, said, “Henceforth, from the next billing period, distribution companies will no longer charge their customers monthly fixed charges. Fixed charge is that component of the tariff that  commits electricity consumers to paying an approved amount of money not minding whether electricity is consumed during the billing period.

“Under the new tariff regime, electricity consumers will now only pay for what they consume from month to month,” Amadi said, adding, “This is good news for electricity consumers who have long asked for a more just and fair pricing of electricity.

“The regulatory commission had promised to address all the complaints against fixed charges through a regulatory process that promotes investments in the electricity industry without unfairly burdening electricity consumers. This is in line with NERC’s mandate to be fair in all its regulatory interventions”.

“Although, the new tariff regimes comes with an increase in energy charges, all electricity consumers (residential as well as commercial) will no longer pay fixed charges, so their total bills will depend on the electricity they actually consume and may be reduced when they conserve electricity. Consumers will no longer be spending money every month to pay for fixed charges even when they do not receive electricity in their homes and business.”

According to the chairman of NERC, “The objective of the new tariff is to enable prudent consumers to save money on electricity bill as they can now control their consumption and not pay monthly fixed charges”.

“In line with the transparent disposition to its operations full details of the new tariff regime would be advertised in major national dailies and Commission website within the next 24 hours.

According to the Commission, “the new tariff regime is the result of a transparent, rigorous and credible rate review process. The tariffs will lead to greater reliability in the provision of electricity. More people will progressively have access to the grid, more meters will be deployed and the need for self generation would be gradually reduced.”

The Commission expects the electricity distribution companies to provide better customer service in all aspects of their operations and would hold the electricity distribution companies responsible for their service level agreements.



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