KEY POINTS
- NERC fines AEDC $1.06m (N1.69 billion) for overbilling customers.
- The fine represents 10 percent of overcharged amounts from January to September 2023.
- AEDC must improve service delivery and meet minimum power supply standards.
The Nigerian Electricity Regulatory Commission (NERC) has fined the Abuja Electricity Distribution Company (AEDC) N1.69 billion for overbilling customers.
The penalty, outlined in a regulatory document titled Order NERC/2024/114, was issued in the September 2024 Supplementary Order and is a direct result of AEDC’s failure to comply with NERC’s guidelines on estimated billing.
NERC’s investigation found that AEDC had overcharged customers between January and September 2023.
According to Punch, the fine represents 10 percent of the overbilled amount, and NERC has mandated that this sum be deducted from AEDC’s annual operating expenditure starting in September 2024.
Non-compliance with billing regulations
NERC imposed the fine following consumer complaints and an investigation that revealed AEDC had disregarded the commission’s earlier directives on capping estimated billing.
The commission emphasized its decision to hold electricity distribution companies accountable for adhering to regulatory standards.
According to the Supplementary Order, NERC stated: “The commission has approved the deduction of N1.69 billion from AEDC’s annual operating expenditure as a penalty for non-compliance with the order on capping estimated bills.”
NERC also adjusted AEDC’s revenue and tariff structures to reflect this penalty.
Service delivery and compliance requirements
In addition to the financial penalty, NERC has directed AEDC to take immediate steps to improve its service delivery.
The commission mandated that AEDC continuously monitor its service levels, especially concerning electricity supply to Band A feeders, which are expected to provide between 18 to 20 hours of electricity daily.
NERC warned that if AEDC fails to meet these service standards for two consecutive days, the company must provide a public explanation on its website.
Moreover, AEDC is required to procure 61 MW of embedded generation, with at least 30 MW sourced from renewable energy, to enhance electricity supply reliability. This procurement must be completed by April 2025.
Tariff adjustments and consumer compensation
The Supplementary Order also approved new tariffs for AEDC, effective September 1, 2024, and included provisions for compensating customers for service delivery failures.
Customers on Band A feeders who do not receive the guaranteed level of service 20 hours of electricity per day will be compensated if the supply drops below that threshold.
NERC reiterated that these measures are designed to protect consumers from unfair billing practices while ensuring electricity distribution companies maintain adequate service levels.
Furthermore, the commission emphasized its commitment to enforcing regulatory compliance and enhancing consumer protection within the power sector.
