Residents in parts of Abuja who use prepaid meters said they do not pay more for electricity consumption but pay their bills more frequently due to improved power supply.
Nairametrics spoke to some metered Nigerians about their experience with electricity bills following the improved power supply in the country.
Rod. Ejike Thompson, a resident of Nyanya, Abuja says that in the first quarter of 2022, when the power supply was dire, he recharged his meter once a month, compared to those days when he recharges up to three times a month at the rate of N2000.
“I wouldn’t say the rates have gone up, I would rather say the frequency of charging is higher, either way, that’s a plus for NERC and others across the value chain,” Thompson told Nairametrics.
Victor Johnsona resident of River Park Estate, Lugbe, Abuja, says that since 2021 he has noticed slight reductions in the number of units he receives when he tops up his meter to 20,000 N. According to him, he was receiving 300 units for that amount, but not anymore.
“Apart from that, it seems that the rate of consumption is faster now than two years ago, for example. It appears that the meters being installed are now reading faster than the older meters that were distributed years ago,” Johnson told Nairametrics.
Johnson’s experience is due to the fact that he receives electricity more frequently and therefore it is inevitable that his meter will “run faster” than when it was rarely supplied with power. It’s simple logic.
The experiences of Abuja residents are no different from those of other electricity consumers in the country: they get more for their money. This is due to the recently introduced billing system which ensures that consumers are charged for what they consume rather than based on estimates. Known as service-based tariff (SBT), the system is based on the hours of supply available to consumers.
What is a service-based rate? (SBT)
Utility-based tariffs are electricity supply costs based on a reflection of expenses along the electricity value chain. Consumers are billed according to the power they receive.
In a 2021 editorial, Electricity Lawyer, Ivie Ehanmo wrote that NERC’s Service Based Tariff (SBT) program is an intervention to address the liquidity crisis in the electricity sector in Nigeria.
According to Ehanmo, the methodology under the SBT is based on the hours of availability of supply for different categories of customers along the value chain, indicated by service levels guaranteed by the electricity distribution companies. (Discos) to end users, following regular consultation and monitoring processes. by NERC.
Service-Based Tariffs (SBTs) came into force in 2020 when the Nigerian Electricity Regulatory Commission (NERC) ordered electricity distribution companies to start collecting SBTs nationwide.
Under the service-based tariff program introduced by NERC, which is subject to regular review, electricity consumers are classified from band A to band E.
What NERC told Nairametrics
- According to information from sources at the Nigerian Electricity Regulatory Commission (NERC), Nigerians should not pay more for better power supply.
- Nigerians can be assured of guaranteed stability of supply, as the cost of additional generation and supply has been rolled into the current tariff, so they would not have to pay more.
- An average of N2 was added across the bands on the SBT for the July minor review order. However, the increase in supply was based on the partial activation of contracts and not on the minor revision of tariffs.
- Funding for this comes largely from government repayments in the event of a deficit and the provision of loans to guarantee the long-term payment of bills.
What you should know
In June 2022, Sanusi Garba, Chairman of the Nigerian Electricity Regulatory Commission (NERC), announced that Nigerians would start enjoying increased power supply from July 1.
According to Garba, the transmission and distribution players were well aware of their obligations and would fulfill the conditions required of them.
“We may not have 24/7 power supply from July 1, but Nigerians will see the trajectory as the target is to have an average of 5,000 MW per day for the transmission and distribution”, Garba said.
In case you missed it
- Nairametrics previously reported that due to the introduction of utility-based tariffs, Nigeria’s electricity sector, classified with gas, steam and air conditioning supply, recorded real GDP growth of 78 .16% year over year in the second quarter of 2021.
- Nairametrics also reported that Nigeria’s power generation peaked at 5,043.4 MW on Thursday September 1, 2022, a significant improvement from the peak of 4,664.1 MW recorded on Wednesday August 31, 2022, which is the generation highest recorded daily.
- Based on data available from the Nigerian Electricity System Operator (NESO):
Energy Highlights for September 8, 2022
- Peak generation – 4,451.10 megawatts
- Off-peak generation – 3,884.80 megawatts
- Energy generated – 101,926.22 megawatts per hour
- Energy sent – 100,597.81 megawatts per hour
Failure
A brief conversation with residents of Apo neighborhood in Abuja revealed that some residents are still not metered and their electricity bills are paid directly to the Power Holding Company of Nigeria (PHCN).
Mr. Tola Moshood told Nairametrics that his inability to get a prepaid meter for his home resulted in estimated billing for more than two years.
He attested to an improved power supply in his neighborhood and said he is currently paying 9,500 naira per month as electricity bill. However, he notes that during the first quarter of the year, when power supply was less available, he paid N8,000 per month.
Conclusion
NERC sources told Nairametrics that as customers migrate to higher rate bands, their rates also increase. This could be the reason for the unit rate differences experienced by some metered customers.
According to NERC sources, investments have been made by distribution companies (Discos) to ensure that customers with lower tariffs receive improved supply beyond their minimum supply up to a period of three months. Then Discos must write to NERC with proof of the upgraded offer before migration is permitted.
So if D-Band customers receive an upgraded power supply of around 12+ hours for up to three months, their Disco writes to NERC to migrate them to C-Band, then they have to pay C-Band tariffs, and not from the D band.
