FG Abolishes Fixed Electricity Charges, Hikes Tariffs

Electricity photo

The Nigerian Electricity Regulatory Commission has increased electricity tariffs, while removing fixed charges for all consumers.

The new tariffs were approved Sunday. 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.

Mr. 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.

“NERC 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”, he said.

Some customers will however pay more for electricity under the new regime of charges. The NERC chairman said the objective of the new tariff was to “enable prudent consumers to save money on electricity bill as they can now control their consumption and not pay monthly fixed charges”.

The new rates show that residential consumers in houses, flats or residences with electricity lifeline of 50 kWh, classified as R1, would not be affected, as they would continue to pay N4 kWh for unit of electricity consumed.

However, residential customers, who use single and three-phase meters in the houses and residences and are classified R2 under the area covered by Abuja Electricity Distribution Company (AEDC), will now pay N23.51kWh against the old rate of N13.91 kWh.

They will not pay the N702 fixed charge again. AEDC covers Niger, Kogi and Nasarawa states and the Federal Capital Territory.

Equally, their counterparts in Eko and Ikeja electricity distribution areas will no longer pay N750 fixed charges, but will pay N10 kWh and N8 kWh more respectively in their energy charges.

Consumers in the two zones, consisting residents in southern part of Lagos state and Agbara in Ogun state as well as northern segment of Lagos State are currently paying N12.87kWh and N13.61 kWh respectively.

Electricity consumers in Kaduna and Benin electricity areas will no longer pay N800 and N750 fixed charges, but will pay N11.05 kWh and N9.26 kWh more, respectively.

Their current charges are N16.90 kWh and N12.54 kWh.
Kaduna and Benin zones comprise Kebbi, Kaduna and Zamfara, Edo, Ekiti, Ondo & Delta states.

Commercial consumers in Ibadan and Enugu who use their residences as factory for manufacturing goods and classified as C2, with maximum demand consumption capacity, will no longer pay fixed charges of N17,010 and N22,141. But, their energy charges will increase by N12.08 kWh and N13.35 kWh respectively.

They currently pay N25.18 kWh and N24.01 kWh respectively. Details of all charges covering all regions would be available by Tuesday, the commission said.

Mr. Amadi said the new tariff regime is coming with renewed commitments by the electricity distribution companies (DISCOs) to rapidly improve the quantity and quality of electricity supply in their areas of operation as contained in service agreements.

The tariff order, NERC stated, would encourage the DISCOs to develop new sources of supply within their franchises to increase the quantity and quality of supply to target customers on a willing buyer willing seller basis.

These measures, he said, was necessary to improve electricity supply across Nigeria and ensure that the DISCOs increased investment to ensure reliable and uninterrupted electricity supply in the country.

“Henceforth, every DISCO should distribute meter to all its customers,” Mr. Amadi said. “The metering policy will be strictly enforced. There is zero tolerance for overbilling 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”.

He said those 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 would no longer be billed by the DISCOs under the new tariff regime.

The DISCOs would not disconnect those categories of consumers, the NERC Chairman said, pointing out that this was a departure from the old practice where customers were expected to first settle the bill, while dispute resolution was in process.

To close the wide metering gap of over 50 per cent and reduce high incidence of collection losses in the Nigeria Electricity Supply Industry (NESI), NERC said no DISCO was allowed to connect new customers without providing meter first.


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