Federal Competition & Consumer Protection Commission

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Federal Competition & Consumer Protection Commission

An official website of the Nigerian Government

Federal Competition & Consumer Protection Commission

Arbitrary billing, group disconnection of electricity consumers constitute gross consumer abuse – FCCPC raps DISCOs

The Federal Competition and Consumer Protection Commission (FCCPC) has appraised the interaction between the nation’s electricity distribution companies (DISCOs) and their consumers, declaring that arbitrary billing and group disconnection of electricity consumers without consideration for those paying their bills constitute a gross abuse of consumer rights.

The Director General of the Council, Babatunde Irukera, said these in Abuja, at a meeting with the top management of Abuja Electricity Distribution Company (AEDC) led by its Managing Director, Engineer Ernest Mupwaya. The Director General noted that the vast majority of complaints in the sector are these two issues.

Irukera, while expressing understanding about challenges in the industry, said “there is no excuse for how consumers are treated”.

He pointed out that “the key complaints that we receive are arbitrary, unsupported and unreasonable billing; people not being treated with dignity, the complaint resolution process is either lacking or unclear and there’s really no respect for people”.

The director general disclosed that consumers’ complaints have not been primarily about supply, but about billing for non-existent supply, stressing that “as a matter of fact, a vast majority of supply complaints are attributed to the fact that you are asking them to pay for something that was not supplied and the other significant reason is group disconnection”.

According to him, “DISCOs have gotten to a point where no one takes their bills seriously anymore, because they are considered outrageous. I think the pressure on metering will not be so bad if the estimated billing was more transparent and reasonable”. He noted with regret that “what DISCOs are doing is connecting their balance sheets to receivables from consumers, but consumers are connecting what they owe to what they receive”.

Irukera, while charging the distribution companies to stop the arbitrary billing system, asserted that “connecting balance sheet to an opaque arbitrary metering system is the worst form of abuse, especially for an essential public utility”.

He also contended that group disconnection usually adopted by distribution companies because of the debts owed by some members of the affected groups unfortunately disregards and undermines the rights of other consumers in the groups who did not owe.

He stated: “You see people who are complaining about supply because they, as individuals, have been responsible, but the DISCOs have painted them with a broad stroke and disconnected even the responsible people. As a lawyer, our approach to criminal work, even legal work, has always been that let the guilty man go free instead of punishing the innocent man.

“For me, there’s something fundamentally, absolutely irreparable and inexcusably wrong with penalising people because of the conduct of others. It is just not excusable. Government should never do that to its people. But if government does it as a state actor, as inexcusable as it is, it might even be permissible. But one person who has absolutely no right and should never have the prerogative to do it is a private citizen to another private citizen. And that is what DISCOs do. They group-disconnect consumers. If there’s one responsible consumer who is being disconnected unjustly, what you are doing is that you are discouraging responsibility”, he added.

The FCCPC boss observed that group disconnection is antithetical to the promotion of an enabling environment for investment, stressing that it “is the quintessential case for mistreatment of an otherwise responsible consumer”.

Earlier, the AEDC managing director had spoken of the need for the company to have a cost reflective tariff for it to have a seamless and a more robust operation, stressing that fluctuation in foreign exchange rates and inflation impact on its activities.

On the issue of estimated billing, he disclosed that efforts are being made to address the metering gap with more meters for consumers and the adoption of an interim plan of metering transformers for a more accurate estimation.

He stated: “The issue of estimated billing has not been fully resolved because of the low rate of metering, and this is closely tied with the impairment on the balance sheet which is tied to tariff issues. The balance sheets are impaired to the extent that we are facing huge challenges to attract investments. But I must say that the government, through the power sector recovery programme, has put up a plan that will address these gaps.

“There will be a reset this year, and there will be some level of adjustments in such a way that the balance sheets will look better, and this will give us impetus to get more finances. I think the whole plan is premised on DISCOs being able to meter customers 100% over 24 months. So we have positioned our sales to meet this challenge of metering. But beyond that, we realised that whereas it is important to meter every customer, there is a very quick win to meter all the transformers”, he said.

According to him, the value of metering transformers is that “even in cases where we have to do an estimate, the estimate becomes very accurate, because it is being done on the basis of measured energy up to the level of distribution transformers, unlike now where these formulas are being applied over a large cluster.

“If you pick a large cluster, there will be distortions of the outliers. There will be customers who will have high estimated bills, there will be others who will have low estimated bills. But if you are doing your estimated billings at the level of the transformer, then you are more accurate, and the other benefit is that you can quickly identify areas, transformers and even customers where electricity is being stolen, because it is important to identify leakages in power, because leakages distort the sharing formula. If everybody is identified and there is equitable sharing, then the estimated billing becomes very accurate. And this will be followed by the actual mass metering. But before the mass metering arrives, we think we can have every means to do the transformer metering”, he added.

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