Nigerian Electricity Regulatory Commission Imposes ₦1.69bn Fine on Abuja Electricity Distribution Company

The Nigerian Electricity Regulatory Commission (NERC) has imposed a staggering fine of ₦1.69 billion on Abuja Electricity Distribution Company (AEDC) for overbilling customers. This decision comes after NERC investigated AEDC’s billing practices and found the company to be non-compliant with the commission’s previous order on capping estimated billing for electricity consumers.

According to NERC, the fine is a result of AEDC’s failure to adhere to the commission’s guidelines. The company had overcharged customers from January to September 2023, prompting NERC to impose a fine equivalent to 10 per cent of the overbilled amount. In addition to the fine, NERC has also directed AEDC to adjust its revenue requirements and tariffs.

The fine is the latest in a series of measures taken by NERC to ensure that electricity distribution companies comply with regulatory guidelines and protect consumers from unfair billing practices. The commission has emphasized its commitment to improving service delivery and reducing the burden on electricity consumers.

In a statement, NERC noted that it has approved the deduction of ₦1.69 billion from AEDC’s annual operating expenditure effective September 2024 as a penalty for non-compliance with the order on capping estimated bills. The commission has also given AEDC a ultimatum to procure a minimum of 61 MW of embedded generation, with at least 30 MW 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 has emphasized that this measure is necessary to meet AEDC’s service delivery commitments under its Service-Based Tariff framework.

In addition, NERC has made provisions for compensating customers for service failures, particularly those on Band A feeders. According to the commission, AEDC will 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.

With this fine, NERC has sent a strong signal to electricity distribution companies across Nigeria that it will not tolerate non-compliance with regulatory guidelines. The commission has also given AEDC a clear roadmap for improvement, including the need for increased transparency and accountability.

As the Nigerian electricity industry continues to evolve, the NERC’s decision serves as a reminder of the need for cooperation between regulators and electricity distribution companies to provide reliable and affordable electricity services to consumers.