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Monday, October 5, 2015

Metering: NERC fines Ikeja power firm N131.4million

Chairman, Nigerian Electricity Regulatory Commission, NERC, Dr. Sam Amadi
The Ikeja Electricity Distribution Company has been fined N131.4m by the Nigerian Electricity Regulatory Commission for defying the regulator’s metering order.

According to NERC, the firm has been sanctioned for its “flagrant breaches” of the Credited Advance Payment on Metering Initiative Order.

It stated that the fine was contained in Order NERC/141 and was issued on September 29, 2015 as a follow up to an earlier notice of commencement of enforcement action on the Disco alongside 10 others.

NERC said in a statement on Sunday that the firm, also known as Ikeja Electric, had manifested flagrant breaches in the implementation of the metering initiative.

It said, “The seven days granted (the firm) to show cause why enforcement action should not be commenced expired on August 24, 2015 and IKEDC has failed, refused and/or neglected to respond to the manifest or provide a satisfactory response.

“It is hereby ordered that IKEDC shall with immediate effect from the date of this order comply with the CAPMI order and forward evidence of full compliance to the commission within two weeks. 

IKEDC shall pay an administrative fine of N250 per minute of every hour of the day for a period of one year from September 29, 2014 to September 28, 2015 for non- compliance with the CAPMI order, with a moratorium from May 14, 2013, being the date of the CAPMI order, to September 28, 2014.”

The electricity distribution company was further ordered to “pay an administrative fine of N500 per minute for every hour of the day that it continues to default from October 12, 2015 until it complies.”

NERC said IKEDC’s action violated Section 63(1) of the Electric Power Sector Reform Act, 2005; Section 2(1) of the terms and conditions of its licence; as well as the commission’s order on the CAPMI.

The CAPMI is an initiative of the commission to assist the power distribution companies to close the wide metering gap in the power sector. It was introduced following a nationwide study conducted by NERC, which revealed that more than 50 per cent of electricity consumers were not metered but instead were on estimated billing.

The initiative permits willing electricity consumer to pay for their meters, which should be supplied within 45 days after payment is made. The customer is thereafter refunded his money over a period of time through a rebate or reduction in the fixed charge component of the electricity bill.

NERC said it initiated the scheme following complaints of lack of funds to meter customers by the Discos, adding that the wide metering gap accounted for the high incidence of customers’ complaints, commercial losses and high operating cost in the Nigerian electricity supply industry.

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