FG Hikes Electricity Tariffs; Abolishes Fixed Charges


Light relief comes on Nigerians as the era of paying huge sums of money on electricity they barely consumed has come to an end. Against its promise to increase electricity supply in the country, the Nigerian Electricity Regulatory Commission (NERC) has removed fixed charges for all consumers while increasing electricity tariffs.

As contained in a statement on the company’s website, signed by its Head of Public Affairs Department, Dr. Usman Abba Arabi, the new electricity tariff regime approved by the Nigerian Electricity Regulatory Commission has removed fixed charges for all classes of electricity consumers

The statement says that distribution companies would from the next billing period, no longer charge their customers monthly fixed charges.

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

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 regime comes with an increase in energy charges, all electricity consumers – residential and commercial – will no longer pay fixed charges.
 Their total bills will depend on the electricity they actually consume and may be reduced when they conserve electricity.

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.

Sam Amadi noted that though some customers will however pay more for electricity under the new regime of charges, 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”.

For better understanding of the new rule, it means that residential consumers classified as R1 with electricity lifeline of 50 kWh, would not be affected, as they would continue to pay N4 kWh for unit of electricity consumed. Also, residential customers (R2 customers) in Eko and Ikeja electricity distribution areas will no longer pay N750 fixed charges. They will be getting N10/kwh and N8kwh increase respectively in their energy charges.

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

Commercial consumers will also benefit from the new tariff. For example, commercial customers’ classification C2 in Ibadan and Enugu will no longer pay fixed charges of N17,010 and N22,141. Their energy charge will increase by N12.08kwh and N13.35kwh respectively.

The commission promised to provide full detail of all charges covering all regions in the country by Wednesday.

The  NERC Chairman also assured Nigerians that the new tariff regime will be 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.

According to him, taking these measures, 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 meter 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.

The chairman explained further that 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. He stated that DISCOs would not disconnect those categories of consumers.

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