Tariff bands

In the past six months, the Nigerian Electricity ,Regulatory Commission ( NERC) appears to have been fiddling with the electricity tariff regime. The cost of electricity has gone up, down and up again, leaving electricity consumers holding the short end of the stick all the time.

In other words, whether the tariff is increased or decreased, the perennial epileptic power supply remains a constant to the chagrin of customers. Many citizens who are desirous of having constant electricity in their homes, offices, factories and other business places, usually fall back to their power generators at great cost.

On April 3, 2024, the electricity industry regulator raised the electricity tariff. The decision triggered an instant uproar from the public, compelling the NERC to make some clarifications. It explained that the increase was for customers enjoying twenty (20) hours power supply daily.

Customers in this category were said to be under the Band A classification and the increase saw them paying N255 per kilowatt per hour from the from the then N66 per kilowatt per hour. Following the regulator’s footsteps, the Abuja Electricity Distribution Company (AEDC ) categorised customers into tariff bands based on the average hours of electricity supply received daily.

The bands range from A to E, with Band A customers expected to enjoy 20-24 hours of power daily, descending to Band E customers who are expected to receive 4-8 hours of electricity per day.

In between the two extremes are Band B ( 16-20 hours) , Band C (12-16 hours and Band D(8-12 hours). But even that classification attracted a lot of criticisms as the tariff hike took immediate effect, notwithstanding the harsh economic realities.

Tariff hike

Apparently responding to the complaints as well as the pull of market forces, NERC later approved an 8.1 per cent cut in electricity tariff for customers under the Band A class nationwide.

This cost reduction brought the tariff from 225/ KWh down to 206.8 /KWh. However, the reduction was attributted to the relative appreciation of the Naira against the Dollar at that time.

While it appears as if the upward and downward movements on the tariff chart have been limited to Band A, it has been observed that there have been marginal changes on the other bands.

Complaints galore

Even with this marginal cut in the tariff, many residents of Abuja have expressed their misgivings on the tariff bands and their cost implications. In addition, many customers have found it difficult reconciling the band classifications, the bills that they have to pay and the number of hours they enjoy electricity in a day.

One of the complaints came from Kado Estate where some senior citizens resident in the area said their classification into Band A was a misnormer as they had retired from active service and living on their meagre pensions.

They argued that classifying them as Band A customers meant they would pay more for electricity even when they cannot afford the prescribed rate. In addition, some low income earners who reside in Kado Estate also voiced out their displeasure at the classification.

They argued that while estate may have some rich people living in some mansions, it was wrong to assume that everyone in the area would have the financial muscle to pay the high tariff.

Similarly, some residents of WuseII, Abuja have complained about their inclusion in Band A and the cost they have to bear if they must have public power supply. Worse still was the complaints of poor services in spite the huge tariff customers have to pay.

Random checks

Inside Abuja obtained one of the letters of complaints addressed to the Chairman/ CEO of the Nigeria Electricity Regulatory Commission, Engr Sanusi Garba. The letter dated May 7, 2024 reads: ” I am writing to bring to your attention the issue of inadequate power supply to House No … ( address withheld), Wuse II , Abuja.

In your recent gradding, my house falls in your Band A category. “According to you, Band A customers are to enjoy twenty (20) hours if uninterrupted power supply every twenty 24 hours.

However, I regret to inform you that the current power supply in my house does not meet the standard set by you for Band A customers. “Despite my classification as Band A, I experience frequent power outages and irregular supply, greatly inconveniencing me and indeed the community.

This, no doubt affects our overall well being. The purpose of this letter is to bring to your notice our flight and request you improve on the services you render.”

People’s verdict

In another letter dated July 26,2024 and addressed to the Minister of Power, a customer placed in Band A, appealed for a reassessment of the Band classification due to the outrageous bills he was being made to pay.

The letter read thus: ” I am writing to express my concerns regarding the recent classification of my residence into Band A. Since the implementation of this new banding system, in April 2024, my electricity costs have skyrocketed beyond reason.

In April, the bill was N314,000; in May, the bill was N210,000; in June, it was N255,000 and in July, the bill was N320,000. Therefore, the total for four months only isN1,099,000.”

According to the customer, this figure does not include the additional expenses he had incurred on diesel generator and solar inverter during the same period. He lamented that even at that, he never had up to twenty hours of uninterrupted power supply.

The customer expressed surprise at the humongous electricity bills and reminded AEDC that the property in question is a private family residence and not a factory or any commercial establishment.

“The current classification into Band A is financially overwhelming, unsuitable and excruciating for us. The purpose of this letter therefore is to respectfully request that you use your respected office to reconsider and reclassify my house into any other band. This adjustment would significantly alleviate the financial burden,” the customer wrote.

Response

In response to one of the letter, NERC’s Deputy General Manager, Consumer Affairs, Shittu Shaibu acknowledged the complaints from various customers but said all such complaints would be redirected to the AEDC for necessary action.

The letter dated May 20, 2024 read thus: “In line with the Commission’s Consumer Protection Regulation 2023, all complaints on your electricity supply and other billing issues are to be sent to your nearest Business Unit of Abuja Electricity Distribution Company, Consumer Complaints Unit.

“If your request is not satisfactorily addressed, you can forward your complaint to our Abuja Forum Office located at No. 14, Riad 131, Gwarinpa, Abuja.

You complaint has however been forwarded to Abuja Electricity Distribution Company for necessary action and we shall revert soon.”

Bottom line

A close scrutiny of the letters reveals the harrowing experiences of an average even consumer in Nigeria. Whereas in other climes electricity is a basic service that is readily available whenever one needs it, the situation in Nigeria is a different ball game.

Here, an average customer who desires to have electricity in his/her home is subjected to multiple hassles. More often than not, what he)she gets is poor services at huge cost. The electricity sector is yet to recover from the era of the National Electric Power Authority (NEPA) which ran as a monopoly.

It was an era marred by epileptic power supply and outrageous bills. Unfortunately, not much has changes as the successor companies who are now the service providers are yet to come to terms with the emerging competition in the sector.

The liberalisation of the sector has opened the windows to alternative energy sources such as solar and windmill. There are now many off grid power projects springing up in different parts of the country.

The implication is that if the likes of AEDC do not sit up, many of their customers would migrate to these other options if they find them better in terms of cist, efficiency and reliability in service delivery.