The Abuja Electricity Distribution Company (AEDC) has been fined N1.69 billion by the Nigerian Electricity Regulatory Commission (NERC) for overcharging customers from January to September 2023.
NERC claims that AEDC’s noncompliance with the commission’s prior order to cap anticipated billing for electricity users is what led to the penalty.
The fine, which is described in “Order NERC/2024/114,” was a component of NERC’s September 2024 Supplementary Order, which was signed by Commissioner for Legal, Licensing, and Compliance, Dafe Akpeneye, and Vice Chairman Musiliu Oseni on August 30.
The order comes after an examination of AEDC’s billing procedures showed that, from January to September 2023, customers had been overcharged. The 10% fine is the total amount of the overcharge.
The order from NERC says, “Pursuant to the Commission’s Order NERC/2024/004 on Non-compliance with the Capping of Estimated Bills and subsequent petition hearings and review of data further provided by AEDC, the Commission has approved the deduction of N1.69Bn from the total annual OpEx of AEDC effective September 2024, being the 10% of the overbilled amount by AEDC for the period covering January–September 2023.”
Indices Impacting Electricity Tariffs
Key variables influencing Abuja Electricity Distribution Company’s (AEDC) electricity rates from September through December 2024 have been examined by the Nigerian Electricity Regulatory Commission (NERC).
Tariff predictions are being revised using the exchange rate of N1,601.50 to the US dollar, the July 33.4% Nigerian inflation rate, and the 2.9% US inflation rate.
The assessment upholds Abuja DisCo’s projected average offtake of 611 MWh/h as of January 2024. Furthermore, under the Petroleum Industry Act (PIA) 2021, NERC has established a benchmark gas-to-power price of US$2.42/MMBTU and a gas transportation tax of US$0.80/MMBTU.
Per the guidelines, the NERC authorised an end-user rate of N117 KWh, with a cost-reflective tariff of N195 KWh for September.
In order to improve the reliability of the electricity supply within its franchise area, AEDC is required by the Supplementary Order to acquire a minimum of 61MW of embedded generation, of which at least 30MW must come from renewable energy sources.
The NERC states that the procurement needs to be finished by April 2025. In order for AEDC to satisfy its service responsibilities under the Service-Based Tariff structure, NERC stated that this step is essential.
Furthermore, new tariffs with provisions for compensating consumers for service failures—especially those on Band A feeders—were approved by NERC and will take effect on September 1, 2024.
