NERC to enforce compensation to electricity consumers for under-supply

THE Nigerian Electricity Regulatory Commission (NERC) is set to enforce compensation to electricity consumers for the under-supply of power to their homes and businesses.

The commission’s move follows several complaints by energy consumers that the Service-Based Tariff (SBT), which has led to a huge increase in electricity bills paid by customers, only places obligations on them without appropriate sanctions for Distribution Companies (DISCOs) that under-supply.

Abba Terab, Deputy General Manager, Markets Competition and Rates, NERC, made this known at the 58^th Session of the Power Dialogue organized by the Electricity Hub, who said that for now, compensation will be based on a 60-day cycle.

According to a report by THISDAY, customers are to pay for electricity in correlation with the level of service they get and how long they receive power daily. Therefore, it will be based on a minimum average hour of power supply and other metrics.

Under the policy, consumers are divided into five bands A–E, where band A is for customers who get 20 hours of power and above daily; B is for customers who get power for 16 hours daily and C covers customers who enjoy power for 12 hours and above a day.

Also, D is for consumers, who enjoy power for 8 hours and above, while band E is for customers who only get four hours and above but below 8 hours of power supply daily.

The NERC deputy general manager said as the process gets fully automated, the commission will migrate DISCOs to a monthly compensation arrangement adding that customers who do not get the expected quality and quantity of supply will be refunded and downgraded to a new band while there will be an attendant adjustment on their tariff levels.

Terab said in cases where the problem of lack of supply was not from the DISCOs, the Transmission Company of Nigeria (TCN) would be compelled to compensate the Discos with the same procedure for sanctions going for the Generation Companies (Gencos).

“If I am in band A, I should get band A service and when I am paying for band A service and I don’t get band A service, but I get band B service, I should be compensated accordingly. That’s the position of the commission and it has been made very clear to all operators within the industry,” he said.

“We believe that by the time we carry out the minor review, this will be done. When the automation of the meters is done, compensation will be on a monthly basis. If over a period of six months a customer does not get minimum service, he will get a refund on a monthly basis for the energy.”

Towards implementing the penalty regime, he said the commission is already reviewing the data and at the end of the period before the minor review is concluded, appropriate compensation for customers will be passed on to the defaulting entity.

He said “subsequently, as we fully automate some of the distribution of transformers, because feeders might still be on even when at their level customers don’t have supply, when this is fully automated, it will be done on a monthly basis continually from July onwards.”

Terab further stated that the industry was on the right track on the service-based tariff policy, which is being accelerated by the installation of meters nationwide, adding that because of the implementation of the policy, more energy is being delivered.

“So, some of the generators are operating at an optimal level and are now being pushed to their limits and that’s why some of them (power systems) are failing, maybe because of limitation in gas supply.’’