NERC Imposes N1.69bn Fine On Abuja Disco For Overbilling Customers

Abuja, Nigeria- The Nigerian Electricity Regulatory Commission (NERC) has imposed a substantial fine of N1.69 billion on the Abuja Electricity Distribution Company (AEDC).

The penalty stems from AEDC’s failure to adhere to NERC’s directive on capping estimated billing for electricity consumers.

NERC’s action, detailed in its September 2024 Supplementary Order, which was issued on August 30 and signed by Vice Chairman Musiliu Oseni and Commissioner for Legal, Licensing, and Compliance Dafe Akpeneye, reflects the commission’s commitment to enforcing regulatory standards and protecting consumer rights.

According to Channels TV, an extensive investigation into AEDC’s billing practices revealed that the company had overcharged its customers between January and September 2023.

The fine, equivalent to 10 percent of the overbilled amount, aims to address the financial discrepancies and ensure fair billing practices going forward.

The supplementary order also includes adjustments to AEDC’s revenue requirements and tariffs, underscoring NERC’s focus on aligning the company’s operations with regulatory expectations and consumer protection norms.

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.”

“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.

The Supplementary Order, which will remain in effect until a new tariff review is issued, underscores NERC’s commitment to ensuring that electricity distribution companies adhere to regulatory guidelines while protecting 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 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