▪️ Details of violation and misapplication of new tariffs that landed utility in trouble
The Nigerian Electricity Regulatory Commission (NERC) has slapped Abuja Electricity Distribution Plc (AEDC) with a hefty fine of Two Hundred Million Naira (NGN200,000,000) for failing to adhere to its tariff guidelines, creating a stir among consumers and industry stakeholders alike. The fine comes in the wake of the Supplementary Order to the Multi-Year Tariff Order for 2024, issued on April 3, 2024, which AEDC has been found in violation of.
In a detailed correspondence released by NERC and seen by this publication, it was revealed that AEDC improperly applied an approved tariff increase across all customer bands, contrary to the specific directive that only customers in Band A were subject to the rate hike. The oversight has not only led to undue charges for customers in Bands B to E but has also called into question the operational compliance and fairness standards maintained by one of the country’s leading electricity distribution companies.
The regulatory body’s supplementary order had initially set out to adjust tariffs in a manner that would not unduly burden the vast majority of electricity consumers, particularly those not in Band A. However, AEDC’s misapplication of the new tariffs has breached the trust of its consumer base and contradicted the principles of transparency and equity that form the cornerstone of Nigeria’s electricity regulatory framework.
As part of its remedial directives, NERC has mandated AEDC to reimburse all affected customers in Bands B, C, D, and E through the provision of balance tokens reflective of the rates they should have been charged. This remedial action is expected to be complied with immediately, therefore providing relief to thousands of consumers who were wrongfully overcharged.
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Moreover, NERC’s directive requires AEDC to present evidence of compliance with these corrective measures by April 12, 2024, emphasising the urgency with which the regulatory body seeks to address and rectify the oversight. Failure to meet these requirements could lead to further regulatory actions, underscoring the seriousness with which NERC is approaching this breach of regulatory compliance.
This incident brings to light the challenges facing Nigeria’s electricity sector, highlighting the critical need for strict adherence to regulatory orders designed to safeguard consumer interests and ensure the fair administration of energy services. As the NERC continues to monitor the situation closely, the outcome of this enforcement action is being watched by industry observers as a test of the regulatory framework’s effectiveness in maintaining discipline and fairness in the country’s evolving electricity market.
