Electricity: NERC stops payment of Fix Charge for prolonged blackouts

By Etuka Sunday

The Nigerian Electricity Regulatory Commission (NERC) yesterday nationwide directed electricity Distribution Companies (DISCOS) to stop collecting N750 monthly fixed charge in any area without power supply for 15 days in the month.

The Chairman, Nigerian Electricity Regulatory Commission (NERC) Dr. Sam Amadi while addressing newsmen at the Commission’s headquarters in Abuja said the directive takes effect from May 1st, 2014.

The fixed charge was planned by NERC in customer’s monthly bill to allow the “Discos” to maintain and recover costs on permanent investments, such transformers, cables and poles.

Amadi said NERC has resolved and ordered that from 1st May, consumers who do not receive supply for more than 15 days either cumulative or continuous would not pay the Fixed Charge (FC) for that month.

He added that provided the outage is not due to disconnection (non-payment of bills) or any issue caused by the consumer but as a result of power equipment failure including transformer breakdown.

While explaining the essence of fixed charge in the power system, Amadi said “The fixed charge is a universal practice, a key element in electricity but that does not mean it won’t change in any tariff year.”

The fixed charge may change from one tariff year to another but does not change irrespective of what you consume,” he added.

NERC in clarifying the charge said while the Energy Charge covers actual cost of energy consumed, Fixed Charge covers investments made in permanent power equipment such as poles, cables and transformers; their maintenance cost, and the capacity charge paid to Generating companies (Gencos) for their available generation.

Amadi urged customers to write a formal complaint to respective electricity distribution companies to address the situation “or report to dispute fora in each state for any breach of the order.

He, however, said NERC would not scrap the fixed charge but would continue to review it in line with the demands of the electricity market and international best practice.

The Commissioner for Government and Consumer Affairs division, Dr. Abba Ibrahim urged consumers who have such cases to report to NERC forum office for redress, though he stated that the Discos are mandated to check such outages and forfeit the fixed charges for such months from the affected consumers.