INVOICING ESTIMATED BILLS for unmetered electricity consumers in Nigeria by electricity Distribution Companies, acronym DISCOs, emerged with Billing Regulations by Nigerian Electricity Regulatory Commission, NERC, in 2012. Under weak NERC regulatory system, DISCOs, preying on susceptible Nigerians, ravenously, began to invoice crushing estimated bills to unmetered electricity customers without business ethics, decency and qualms of conscience.
Roughly 10 million electricity consumers are metered in seven years, from 2012. About 52 percent of electricity consumers in the country are unmetered, and are invoiced on estimated billings by DISCOs, according to NERC. For seven years, through estimated invoicing, DISCOs across the country have fleeced over 52 per cent unmetered electricity consumers. Interest groups have been kicking against Disco’s estimated billing system, and described it as “monumental fraud”.
IKEJA DISCO, for instance, presently, invoices estimated bills between N11,000 and N18,000, monthly, to average three-bedrooms flats, in Lagos suburbs, that are fitted with energy saving bulbs, four units ceiling fans, one television set, one average size food freezer, one pressing dry iron – nothing more that consumes electricity supply in the flat – with, perhaps, between eight and twelve-hours daily electricity supply.
In the same neighbourhood, IKEJA DISCO, invoices estimated bills with the same parameter between N11,000 and N18,000, monthly, to three-bedrooms flat, fitted with three units air conditioners, washing machine, energy saving bulbs, four units ceiling fans, one television sets, one average size food freezer, one pressing dry iron, and shops linked to the flat – with, perhaps, between eight and twelve-hours daily electricity supply.
Still in the same neighbourhood. Occupants of three-bedrooms flats, or Duplex, with Pre-Paid Meters, with same or higher appliances in their homes, brags of never consuming N5,000 electricity in one month. Obvious reasons, they claim, are that supply of electricity to consumers have remained epileptic – due to incessant outages as a result of failure of transformers to perform optimally and collapse of national grids.
Given these scenes, while Pre-Paid metered electricity consumers save costs due to outages, DISCOs pass rapacious costs, through invoiced estimated bills to unprotected unmetered customers. They disregard core business ethics, that customers pay for, only, what they consume. That services not provided are not paid for. Also, that services are not paid for, when contractual obligations are not fulfilled. When DISCOs provide services – supply electricity to customers — they must provide evidence of actual consumption through meters. And customers are under obligation to pay for such services.
Public outcries against DISCOs undermining unmetered customers with high invoiced estimated bills, often referred to as “Over Billing” or “Crazy Bills”, have been loud and clear. Huge percentage of what unmetered customers have accumulated as unsettled bills owed DISCOs, are likely, the creation of “Crazy Bills” or “Over Billing”. Nigerians are resilience and flexible people, who, easily, accommodate challenging situations. If they are given electricity bills, commensurate to what they consume, they will pay, and not likely accumulate bills.
Note these scenes. SCENE ONE: June 2019, residents and business owners of Aliu-Bisiru/Erinfolami, Apena Streets, Ago Palace Way, Okota, Lagos State, protested against what they described as “incessant blackout, crazy, estimated bills”, as well as “extortion”, they were subjected to, by Ikeja Electricity Distribution Company. They said, Ikeja Electric, was more interested in meeting business targets, than attending to consumers plight, despite several complaints bordering on poor service delivery.
Kingsley Akujobi, who led the protest, told journalists during the protest: “We’ve been complaining about the crazy bills given to us for a very long time. In fact, in the last four years, we have been receiving terribly high electricity bills. For instance, there are situations where a three-bedroom flat is charged the same amount as a room self-contained apartment. Is it rationale to bill a three-bedroom flat or a room self-contained apartment N13, 000, N15, 000 or even N18, 000 in a month”?
Taofeek Basanya, Business Manager, BM, Oshodi Business Unit, in-charge of the area, reacting to the protest said, “There is no way that we will not resort to estimated bill because not everyone that has prepaid metre. If you were in our shoes, you would do exactly what we are doing because people are consuming energy and there must be a way of getting them to pay for the energy that they are consuming. So, if we are not in a position to give prepaid metre to everybody, then we are constrained to bill on estimated methodology. Billing on estimation is something we cannot cancel.
“On our part, we are doing everything possible to ensure that the bills that we give to our customers are not crazy so, we have metered all the transformers that are feeding the customers so that the energy we are going to bill to customers does not exceed the one that passes through that transformer. But those that are metered, but are still getting bills should come forward and we will put an end to that,” Basanya added.
SCENE TWO: August 2019, residents of Orile-Iganmu community, Lagos, under Eko Electricity Distribution, Disco, after the protest of three months power outage, reached an agreement over billing method to be used by electricity consumers. The memorandum of understanding between the parties was dated July 31, 2019. The parties agreed to use statistical meter that would be jointly read by the parties and charged accordingly.
Officials of Eko Disco, Orile District, and joint development associations in Orile-Iganmu; and Landlord and Tenant Association, signed the agreement. The MoU stated that the meter would be read by persons who understand the figures and are conversant with electricity matters. Billings of customers must accord with readings obtained from the jointly read statistical meter after deduction of prepaid meter users.
“There shall no longer be flat payment as electricity bills, instead customers of the community shall pay their full current bills duly apportioned and corresponding with readings obtained from jointly read statistical meters,” the MoU stated.
SCENE THREE: February 2019, residents of Mushin community, Lagos, under Eko Electricity Distribution, Disco, drew battle line with Eko Disco over estimated billings. They requested to be supplied Pre-Paid meters or will not pay more than N4,000 uniform, monthly, electricity bills per house. And threatened to stop further payment, if their demand is not met.
This decision was taken at a meeting with Bolaji Yusuf Ayinla, their House of Representatives member, and Olayiwola Sobur, Lagos State House of Assembly counterpart, and a communique was issued to this effect. The meeting was held at Mushin Local Government Secretariat, where long standing disputes between the residents and Eko Disco were resolved.
SCENE FOUR: January 2019, residents in Oke-Ira, Aguda, Ogba community, Lagos State, under IKEJA ELECTRIC, staged peaceful protest over high estimated bills received from Ikeja Electric. They were also aggrieved that Pre-Paid Meters were not supplied to the areas as expected. Placards carried by the protesters had inscriptions: “No More Estimated Billing”, “NEPA Bill Is More Than House Rent”, “Bring Prepaid Meter Now’, ‘’Enough Is Enough, We Say No To Estimated Bills”, among others, and said they could resort to court action.
Spokesman for Ikeja Electric, Ayeni, in response to the protest, told journalists that Ikeja Electric had constraints metering some community due to poor wiring of the houses. “We are distributing prepaid metre. When we finish with one business unit, we would face another. We are having constraints pushing out all the metres at once due to the poor wiring of their houses. Anytime we get to a house that is well wired, we meter them immediately. For those whose houses are not well wired, we advise them to do the right thing.”
“We are not charging a dime for meter, we only urge them to clear their bills before we give them their prepaid meter. I have pleaded with them and we have assured them that we would attend to all their requests. They should be patient”, Ayeni added.
SCENE FIVE: December 2018, residents of Jakande Estate, Ejigbo, Lagos State, staged peaceful protest against IKEJA ELECTRIC, over high estimated bills received by the community, and none provision of Prepaid meters to over 3,000 customers in the area.
Their placards inscriptions read: “No More Estimated Billing”, “We are overdue for the Usage of Prepaid Meter”, “Bring Prepaid Meter’ Now”, “We are sick and Tired of Estimated Billing Methodology”, among others. The residents also, threatened court action, if they were not supplied Prepaid Meters.
Ikeja Electric responded to the protest with a letter: “Permit us to state that our unmetered customers were billed based on supply availability in line with Nigerian Electricity Regulatory Commission (NERC’s) approved estimated billing methodology, which ensures that all accounts on the same starting and Distribution Transformer metered and unmetered are billed as closely as possible to ensure fairness and as much as possible eliminate outrageous billing.
“Please note that as a result of peculiarity of the business and attendant industry challenges, we are constrained to meter your community between now and November 2018, but the vicinity has been scheduled for the exercise in fourth quarter of year 2019. The community can as well engage the services of Meter Asset Provider vendors when full operation commences.”
NERC WEAK REGULATION: These protests and others, outside Lagos, are evidences of weak regulatory responsibilities by Nigerian Electricity Regulatory Commission, NERC, since 2012. Eleven DISCOs in the country had field day, imposing heavy financial burden on unmetered electricity consumers, in the guise of estimated billing system. Nigerian DISCOs bought investments, without corresponding interest in capitalising their investment for efficient services to electricity consumers in the country. But resorted to outrageous estimated billing system to capitalise their investment through unmetered customers.
Not surprising, in October 2019, Nigerian House Of Representatives, passed a bill, sponsored by Femi Gbajabiamila, Speaker of the House, to criminalise estimated billing of electricity consumers by Nigerian electricity Distribution Companies, DISCOs. Invoiced estimated bills to customers, if signed into law, it stipulates N1 million fine or one-year imprisonment, or both, for offenders.
Gbajabiamila condemned the DISCOs for whimsically issuing estimated bills on a monthly basis. “This billing is not known by any scientific rule,” he stated, during debate on the bill. The proposed bill compels DISCOs to provide prepaid meters to applicants within 30 days, and barred DISCOs from disconnecting consumers after 30-day period within which meter should be provided and installed.
NERC CAPPING OF ESTIMATED BILLING: It was not unique, when Nigerian Electricity Regulatory Commission, NERC, Monday, directed 11 DISCOs to stop further collection of electricity bill under the estimated billing system. James Momoh, NERC’s Chairman, and Dafe Akpeneye, Commissioner, Legal, Licensing and Compliance, jointly, signed the SUSPENSON ORDER., which became effective from February 20, 2020, and circulated to all DISCOs.
NERC’s new regulation stated that all unmetered residential and commercial (R2 and C1) customers shall not be invoiced for the consumption of energy beyond the cap stipulated in the Order, according to designated distribution companies. The R1 (residential) customers, who, by definition consume no more than 50kw/hr of energy per month, shall continue to be billed at N4/kwhr and a maximum of N200 per month unless amended by an Order of the Commission.
Under Abuja Electricity Distribution Company, N24.30 per kwh was approved for R2 (above 50kw/hr) consumers, and N37.39 for C1 (single & 3 phase) consumers. Under Eko Electricity, residential consumers will pay N24 per kwh, while commercial consumers will pay N30/kwh with different energy caps.R2S consumers under Ikeja Electric will pay N21.30 per kwh; R2T, N21.80; while C1S&T will pay N27.20 and N28.47, respectively.
NERC said: “The energy cap prescribed by the Commission shall only apply to R2 and C1 customers. All other customers on higher tariff classes must be metered by Discos no later than 30 April 2020. If Discos fail to provide meters with this period, these customers are not liable to pay any estimated bill issued by the Disco.
“Any customer on such higher tariff classes not metered beyond 30 April 2020, shall remain connected to supply without further payment to the Disco, until a meter is installed on the premises under the framework of MAP regulations or any other financing arrangement approved by the commission.
“Where a customer’s meter becomes faulty and a replacement meter cannot be provided by the Disco within two working days, the customer shall be billed an average of the last three months billing/vending in accordance with section 16(1) of the MAP regulations until the meter is replaced. NERC noted that the significant level of customer dissatisfaction arising from unrealistic estimated bills have also adversely impacted on the market revenues as a consequence of customer apathy and declining willingness to settle invoices in full.
NERC acknowledged the shortcomings of Meter Asset Provide scheme. And stated that changes in fiscal policy and limited availability of long-term funding, led to limited success in meter roll-out. To address the situation and vast complaints by consumers, NERC repealed estimated billing methodology regulation as basis for computing the consumption of unmetered consumers. And issued April 30, 2020, deadline for proper identification and metering of high energy users.