FG to Pay N180.8bn Subsidy for Band B to E Customers

By Adedapo Adesanya

The Nigerian Electricity Regulatory Commission (NERC) says the federal government is set to pay approximately N180.8 billion in electricity subsidies for power consumers in Bands B to E whose tariffs have remained frozen since December 2022.

Band B to E customers get between 4 to 16 hours of electricity on average and pay around N68 per kilowatts.

Also, according to NERC’s 2023 Annual report released in Abuja on Monday, about 7.3 million electricity customers remain unmetered in the country.

These developments were outlined in the September 2024 Supplementary Order of the Multi-Year Tariff Order (MYTO) of 2024, which was also issued yesterday in Abuja by the power sector regulator, led by Mr Sanusi Garba.

The latest figures released by the regulator showed that out of over 13.16 million registered customers, the electricity distribution companies also known as the DisCos, have been able to meter only 672,539 customers.

This shows the slow-paced metering efforts by the DisCos, leaving a larger amount of customers heavily relying on the controversial estimated billing system.

As of 31st December 2023, only 5,842,726 (44.4 per cent) of the registered 13,162,572 customers in the Nigerian Electricity Supply Industry were metered.

DisCos installed 672,539 end-use customer meters in 2023. A total of 25,847 meters were installed under the National Mass Metering Program (NMMP) framework while 585,265 meters were installed under the Meter Asset Provider (MAP) framework.

The report showed that 6,912 meters were installed through the Vendor Finance Metering framework, while 53 end-use customer meters were installed through the DisCo Financed framework.

This is as industry experts have raised concerns that the slow pace of metering could worsen billing disputes and customer dissatisfaction.

Meanwhile, electricity subsidy dropped to N151.30 billion during the year, indicating a 17.7 per cent decline from 2022.

The report read: “A Minimum Remittance Obligation (MRO) adjusted invoice of N858.03 billion was issued by Nigerian Bulk Electricity Trading plc (NBET) and Market Operator (MO) for energy costs and administrative services to DisCos in 2023.

“The DisCos remitted a total of N706.73 billion, resulting in a deficit of N151.30 billion during the year. Based on the above, the gross DisCo remittance rate to the upstream segment for 2023 was 82.37 per cent.”

According to the report, NERC has approved N26.4 billion for Abuja consumers, N23.76 billion for Ikeja Disco, N22.21 billion for Ibadan Disco, N19.92 billion for Eko Disco, and N14.87 billion for Benin Disco this month.

In the September subsidy cycle, Enugu Distribution Company (Disco) is set to receive N14.61 billion, while Port Harcourt Disco will be allocated N13.45 billion. Kaduna Disco will benefit from N13.14 billion, Kano Disco will receive N12.96 billion, and Jos Disco will be entitled to a subsidy of N11.68 billion. Yola Disco is slated to get N8.06 billion in this round of disbursements.

“In line with the policy direction of the federal government on electricity subsidy, the allowed tariffs for Bands B-E customer categories shall remain frozen at the rates payable since December 2022 subject to further policy direction by the government,” NERC said.

In addition, NERC has imposed fines totalling N8.3 billion on the country’s 11 DisCos for overcharging customers. NERC has also directed the Discos to compensate affected consumers for the improper billing.