NERC Warns Electricity Consumers Against Buying Transformers, Poles For Discos

Folashade Adeniran
Mar, Fri, 2024

Business

NERC warns electricity consumers against buying transformers, poles for Discos

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By Yunus Yusuf
Hajia Aisha Mahmud, Commissioner, Customers Affairs, Nigerian Electricity Regulatory Commission (NERC), has cautioned electricity consumers against self- procurement of transformers, cables and accessories without formal agreement with distribution companies.

Mahmud gave the warning at the commission’s three-day Customers Complaints Resolution Meeting with Eko Electricity Distribution Company’s customers on Friday in Lagos.

The News Agency of Nigeria (NAN) reports that customers at the forum were drawn from Lekki Business Unit which covers Lekki Phase, Ilasan, Ikota, Ikate, Ikate-Elegushi, Osapa, Chevron, Igbo Efon and Agungi.

According to her, lt is not the responsibility of the customers to procure transformers for the DisCos.

“In the event that such happens, the customers and the DisCos must sign an undertaking, so we still say do not buy the transformers,” she said.

The commissioner further explained that the Meter Asset Provider (MAP) offers vendor and DisCos financing options for prepaid meters.

Addressing the funding constraints within the Nigerian Electricity Supply Industry (NESI), particularly concerning the National Mass Metering Scheme, she underscored the ongoing financial struggles experienced by industry players.

She highlighted the critical need for adequate funding and financing mechanisms to support initiatives aimed at improving metering infrastructure and addressing the metering deficit in Nigeria.

Mahmud said, “The Minister of Power, Mr Adebayo Adelabu, is actively engaged in efforts with the Presidential Metering Initiative (PMI), and with adequate funding, the government could potentially eliminate the metering deficit within one to two years, depending on the availability of funds.

“Customers often overlook their rights and entitlements; paying for electricity should guarantee not just power but a superior service experience, and customers should assert their rights to quality service when paying their bills.

“It is crucial for customers to understand that investing in the distribution network, including transformer purchases, is not their responsibility as consumers.

“While the cost is factored into the electricity tariff, if customers choose to invest in infrastructure like distribution transformers, the law permits DisCos to incorporate the investment into the tariff, enabling them to earn returns over the asset’s economic lifespan.

“If about N100 million, for instance, is invested in the purchase of the transformers by the DisCos, it is expected to be spread over fifteen years within the economic life of that asset, and recovery of the cost gradually deducted by customers’ billings.

“We expect the DisCos to use the IGR to fund whatever purchase or use credits to purchase the assets.

“But in the event that they cannot do that and given the liquidity crisis within NESI, the books of the DisCos are already in red.

”So that NERC came up with the regulations, customers can fund the purchase of the DT meters, and they will be refunded.

“In this case, what the regulation stipulates is that the customers have to sign an agreement with the DisCo stating that a certain amount of money has been used to purchase the transformer, and a refund will be made over a certain number of years based on the agreement with interest and dispute resolution clause.”

Mahmoud, therefore, cautioned that it was not the responsibility of the customers to procure transformers for the DisCos.

She added that in the event that such happens, the customers and the DisCos must sign an undertaking.
“The issue is that customers do not know their rights and duties on what they are supposed to do.

“When customers pay for electricity, it is not only electricity but also for services, and they should demand for effective service .

On Investment in network, Mahmud urged customers not to buy transformers and poles.

“We expect the disco to use their IGR, bank and investment.

“Its not the responsibility of customers to buy transformers.

“But in the event that they have to do that, they must ensure an agreement is signed for refund,” she added.

Also, Mrs Susi Eonwuka, Head, Lagos Office of the Federal Competition and Consumer Protection Commission (FCCPC), urged distribution companies to design effective feedback mechanism in responding to customers’ complaints.

Eonwuka, however, assured electricity consumers that the regulator through the forum will address all concerned areas.

She said that the Customers Complaints Resolution forum was designed as one-stop-shop for addressing billing, metering, transformer, connection, disconnection, customer service and other electricity consumer issues within Eko Electricity Distribution Company franchise areas.

She said that the forum is an intervention to bring all the stakeholders together to listen to consumers’ complaint and resolve them.

She added that FCCPC would also get commitment from Discos on a time-frame within which these complaints have to be resolved.

“The major complaints received from all over the country is on over billing, community transformer problems, disregard of metering and regulations from NERC with respect to disconnection, energy tapping, tariff band classification

“Other issues also have to do with account reconciliation, adjustment bottlenecks, disconnection without notice, and billing before connection of the billed property with electricity.

“These are issues that are very serious for consumers, and when they request reconciliation most time the DISCOs are not forthcoming.

“That is why complaints are brought to the NERC and FCCPC, which is the last resort apart from the court,” she said.

In his remarks, Mr Osakuni Emmason, Secretary, NERC Eko Forum, urged electricity consumers to ensure that metering and other electrical equipment within their premises belonging to the DisCo are not tampered with, or by-passed.

Emmason said that customers should also notify the DisCo serving within their jurisdiction of any outstanding electricity bill before moving into new premises.

He said that unauthorised access, which includes illegal connection, meter by-passing and tampering as well as several other physical methods to evade payment for electricity consumption, constitutes a serious crime.

According to him, ln addition to sanctions approved by the Commission, the National Assembly is also considering a request to criminalise it with severe punishments.

”As at February 2024, EKEDC has 435,970 metered customers, 691,967 customers and 255,997 unmetered customers.

”On Maximum Demand meters, EKEDC recorded 7,057 prepaid meters on MD customers, 17,004 metered on MD customers and 9,870 post- paid meters on MD customers.

”On energy theft and meter bypass, EKEDC has 745 customers, recorded 18,500,000,00 reconnections, 17,085,000,00 recorded on administrative charges and 123,510,671.8 was recorded on revenue loss,” he added.

Reacting, Mr Odozimba Iheakanwa, Power Committee Chairman, Lekki Estates Residents and Stakeholders Association (LERSA), demanded a timeline for all the issues that had been raised by the customers within the Lekki-Ajah-Epe axis.

According to him , it does not make any business sense for customers of the utility companies to continue to complain over the same issues despite all sorts of engagement forum where the issues have been raised between the various critical stakeholders.

“EKEDC has been coming to take money from us and so we deserve adequate supply of electricity and satisfactions in the delivery of services.

“Customers within the Lekki- Ajah axis deserved to be treated with maximum respect. There must be promptness in response to issues within a time frame.

He further expressed dismay over attitude of the top management of EKEDC to concerns raised by the LERSA.

According to him, all the complaints have been itemised but nothing has been done to address the issue.

He, therefore, charged the management to be receptive to accomodating concerns of the customers within 1004 Axis to the Epe Corridor.

He also emphasised that efforts have been made in recent times to encourage the Lagos state government to hand over the Lekki 132/33KV 120MVA GIS substation to the EKEDC to improve supply within the axis. (NAN)

Edited by Olawunmi Ashafa

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