The Nigerian Electricity Regulatory Commission (NERC) has imposed a ₦1.69 billion fine on Abuja Electricity Distribution Company (AEDC) for overbilling its customers.
NERC stated that the penalty resulted from AEDC’s failure to comply with the commission’s previous directive on capping estimated billing for electricity consumers.
The fine was detailed in ‘Order NERC/2024/114,’ part of NERC’s September 2024 Supplementary Order dated August 30, which was signed by Vice Chairman Musiliu Oseni and Commissioner for Legal, Licensing, and Compliance, Dafe Akpeneye, as seen on NERC’s website on Thursday.
Following an investigation into AEDC’s billing practices, NERC found that the company had overcharged customers between January and September 2023. As a result, the fine, which amounts to 10% of the overbilled sum, was issued along with revisions to AEDC’s revenue requirements and tariffs.
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.”
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.
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.