The Nigerian Electricity Regulatory Commission has imposed a fine of N1.69bn on Abuja Electricity Distribution Company for non-compliance with the capping of estimated bills and overbilling of customers.
The penalty, documented in Order NERC/2024/114, was issued as part of the commission’s September 2024 Supplementary Order.
The NERC Order stated that Commission has approved the deduction of N1.69 billion from the total annual OpEx of AEDC effective September 2024, being the 10% of the overbilled amount by AEDC for the period covering January – September 2023,” the order read.
NERC also indicated that tariff payable by customers classified under Band A in the month of September is N209.50/kWh, stating that the approved tariffs shall remain in force subject to monthly adjustments of pass-through indices including inflation rates, exchange rates and gas-to-power prices.
The regulatory document, ORDER/NERC/2024/114, which was dated August 30 and signed by Vice Chairman, Musiliu Oseni, and Commissioner, Legal, Licensing and Compliance, Dafe Akpeneye, was published on NERC’s website on Thursday.
According to the Commission, After investigating AEDC’s billing practices, NERC identified that the company had overcharged customers from January to September 2023, leading to the imposition of the fine which is equivalent to 10 per cent of the overbilled amount.
The regulatory document, titled September 2024 Supplementary Order to the Multi-Year Tariff Order 2024 for AEDC, outlined the reasons behind the fine and adjustments to AEDC’s revenue requirements and tariffs.
“NERC has 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.” as contained in the regulatory document.
The fine was levied in response to complaints by consumers and subsequent investigations that revealed AEDC had not adhered to the regulatory guidelines on estimated billing.
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 also issued directives aimed at improving service delivery and monitoring compliance with service-based tariffs.
AEDC is required to ensure the continuous monitoring of its service levels, particularly regarding electricity supply to Band A feeders.
“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 mandated AEDC to procure a minimum of 61MW of embedded generation, with at least 30MW sourced from renewable energy, to improve the reliability of electricity supply within its franchise area.
The procurement of this capacity must be completed by April 2025.
NERC emphasised that this measure was necessary to meet AEDC’s service delivery commitments under its Service-Based Tariff framework.
Regarding the adjustments to AEDC’s tariffs, NERC noted that the commission had approved new tariffs effective from September 1, 2024.
NERC also made provisions for compensating customers for service failures, particularly for those 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.