After multiple complaints from various electricity consumers nationwide, the House of Representatives is about to pass a bill which will criminalize estimated billing. Numerous Nigerians have complained about estimated billing, stating that DisCos use it as a front to serve them outrageous electricity bills. The bill sponsored by the majority leader, Femi Gbajabiamila, seeks to protect the right of every electricity consumer in the country. Issuing estimated bills or disconnecting electricity customers on grounds of estimated billing indicates a failure to comply with the bill. Failure to comply attracts different categories of penalties ranging from ₦500,000 to ₦1,000,000 fines and a jail term of 6 months. In some cases, both the fines and jail term may be stipulated as punishment. However, is criminalizing estimated billing the way forward?
Why do DisCos Use Estimated Billing?
To ensure a balance between energy supplied and electricity consumed, meters are installed. These meters measure how much energy is supplied to an electricity consumer to allow for appropriate billing. Estimated billing occurs when a person’s meter cannot be read, in this part of the world, it’s usually because there’s no meter. It should be noted that serving electricity consumers estimated bill is a worldwide practice, even in advanced countries.
In the case of Nigeria, estimated billing is almost compulsory because of the excessive metering gap. This gap goes back several years, long before the power sector was privatized. The Federal government tried to tackle this problem before the privatization by initiating a National pre-paid metering program but it was highly inefficient and failed. This was worsened by the absence of data on the total number of electricity consumers in the country. Consequently, the DisCos cannot accurately measure the consumption of unmetered customers. Against popular belief, the DisCos would prefer the complete metering of its customers as it reduces their collection losses by 30%.
Does Criminalizing Estimated Billing Solve the Problem?
The bill proposed by Hon. Femi Gbajabiamila may put an end to estimated billing but it creates another problem; how will DisCos measure and bill energy consumed by unmetered electricity consumers? The problem of estimated billing cannot be tackled without addressing the metering gap first. To ensure DisCos can accurately bill consumers for electricity distributed & consumed as well as long-term sustainability of the power sector, meters must be provided before criminalizing estimated billing. Although the bill creates an avenue for metering electricity consumers by stating that they are metered within 30 days of applying for a meter, frankly it’s unrealistic. The bill instructs DisCos to carry out in one month what hasn’t been done in over 20 years. The bill also fails to address what happens while a consumer waits to receive his/her meter, does the DisCo keep providing electricity for the unmetered customer when it cannot charge the customer?
The Nigeria Electricity Regulatory Commission (NERC) recognized this metering gap and put forward two solutions as it looked to curb the challenge. First, NERC provided a methodology for estimated billing. The methodology also provides a protocol for disputing an excessive bill or a bill that does not reflect the customer’s electricity consumption pattern.
NERC also initiated the Meter Asset Provider (MAP) scheme. The MAP scheme looks to assist in the provision of meters for electricity consumers to ensure they pay for what they consume. The MAP program will provide for the supply, installation and maintenance of end-users meters by other parties approved by the commission. In a statement issued by NERC’s Head, Public Affairs Department, Dr Usman Abba Arabi, the program is expected to fast-track the closure of the current metering gap. This will help reduce revenue loss in collections each DisCo presently suffers from.
Other Challenges …
The proposed bill addresses the estimated billing issue and by this seeks to protect the interest of the consumers but it is one-sided. The bill does not protect the interest of the utility companies by addressing issues of electricity theft and meter bypass. To ensure the proper improvement of the power sector, lawmakers should look to protect the interest of both electricity consumers and the utility companies that serve them. If they criminalize estimated billing because of its excessive nature on consumers, policies should also be put in place to tackle the losses DisCos suffer due to electricity theft, electricity vandalism and meter bypass. DisCos lose billions in annual revenue because of these evils but nobody mentions this.
Some observers have also called for lawmakers to make policies which empower NERC so that it can enforce the regulations it puts forward.