NERC Slams N1.69bn Fine On Abuja Discos For Overbilling

The Nigerian Electricity Regulatory Commission (NERC) slapped a N1.69 billion fine on Abuja Electricity Distribution Company (AEDC) for overbilling customers.

According to NERC, the sanction is based on AEDC’s failure to comply with the commission’s previous decision capping anticipated billing for power consumers.

The penalties is part of the commission’s September 2024 Supplementary Order, issued August 30 and signed by Vice Chairman Musiliu Oseni and Commissioner of Legal, Licensing, and Compliance Dafe Akpeneye.

According to Channels TV, after analysing AEDC’s billing methods, NERC determined that the firm overcharged customers from January to September 2023, resulting in the imposition of a fine equal to 10% of the overbilled amount.

The memo explained the reasons for the fine and the changes to AEDC’s revenue needs and pricing.

NERC said it had “approved the deduction of N1.69bn from the total annual OpEx of AEDC effective September 2024, being 10 per cent of the overbilled amount by AEDC for the period covering January-September 2023.”

NERC’s order emphasised, “The commission has approved the deduction of N1.69bn from AEDC’s annual operating expenditure as a penalty for non-compliance with the order on capping estimated bills.”

In addition to the fine, NERC issued recommendations to improve service delivery and ensure compliance with service-based rates.

AEDC is obligated to maintain constant monitoring of its service levels, notably for energy supply to Band A feeders.

The Supplementary Order, which will be in place until a new tariff review is issued, demonstrates NERC’s commitment to ensuring that power distribution firms follow regulatory rules while also safeguarding consumers from unfair billing practices.

“Where AEDC fails to deliver on the committed level of service on a Band A feeder for consecutive two days, AEDC shall on the next day by 10am publish on its website an explanation of the reasons for the failure,” the order specified.

The Supplementary Order also required AEDC to buy a minimum of 61MW of embedded generation, with at least 30MW coming from renewable energy, in order to increase electricity supply dependability in its franchise area.

The procurement of this capacity must be completed by April 2025. NERC underlined that this move was required to achieve AEDC’s service delivery commitments under the Service-Based Tariff structure.

Regarding AEDC’s pricing revisions, NERC stated that the commission had approved new tariffs that would take effect on September 1, 2024. NERC also included measures for paying customers for service outages, notably on Band A feeders.

“AEDC shall make appropriate compensation to the affected customers in Band A feeders listed in Appendix 3 for failure to deliver up to 20 hours of average supply but more than 18 hours of average supply,” the order stated.

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