The Nigerian Electricity Regulatory Commission (NERC) allows electricity customers to claim compensation for lost hours when power distribution companies fail to provide the contracted hours under the Service-based Tariff system. However, despite NERC’s order on migration of customers and compensation for service failures, both the operators and customers have largely ignored the charge, and the regulator has yet to fulfill its obligations under the order entirely.
The order specifies that if the service level on a feeder fails to meet up to 90 percent of the committed service levels within one month, prepaid customers on the affected feeders shall be compensated with a token for units of energy in kWh. Postpaid customers, whose bills are issued with a one-month lag following the period of services rendered, will receive an adjusted applicable tariff based on the actual service experienced during the period.
Unfortunately, the DisCos have disregarded this order, and many customers are not filing the required reports. Some argue that the rules are not enforced by the regulator who drafted them, leaving vulnerable customers exposed to exploitation.
NERC’s data indicates that customers do complain about service failures, but there’s a lack of trust in the regulator’s ability to enforce the rules. The Service-Based Tariff plan, introduced in July 2020, faced delays due to COVID-19 and labor protests. Under this plan, customers are grouped into different tariff bands based on the number of hours of power supplied daily, with varying rates for each band. These tariff rates have since increased by over 30 percent due to the bi-annual yearly review of tariffs to reflect gas prices, inflation, and foreign exchange volatility under MYTO rules.
