Misapplication of New Electricity Tariff: FG Fines AEDC N200m

The Federal Government on Friday, April 5, 2024 through the Nigerian Electricity Regulatory Commission (NERC), fined the Abuja Electricity Distribution Company (AEDC) N200 million for failing to adhere to its tariff guidelines by creating a stir among consumers and industry stakeholders alike.

The fine came in the wake of the supplementary order to the Multi-Year Tariff Order for 2024, issued on April 3, 2024, which AEDC was found to have violated.

In a correspondence released by NERC, it pointedly said that contrary to the specific directive that only customers in Band A should be subjected to the rate hike, AEDC improperly applied an approved tariff increase across all customer bands.

NERC noted that the oversight has not only led to undue charges for customers in Bands B to E but seriously called to question the operational compliance and fairness standards maintained by one of the country’s leading electricity distribution companies.

NERC stressed that its supplementary order set out to adjust tariffs in a manner that would not unduly burden the vast majority of electricity consumers, particularly those not in Band A.

It specifically said that AEDC’s misapplication of the new tariffs has breached the trust of its consumer base and contradicted the principles of transparency and equity that form the cornerstone of Nigeria’s electricity regulatory framework.

Accordingly, NERC directed AEDC to reimburse all affected customers in Bands B, C, D, and E through the provision of balance tokens reflective of the rates they should have been charged, adding that the remedial action is expected to be complied with immediately in order to provide relief to thousands of consumers who were wrongfully overcharged.

NERC also directed AEDC to present evidence of compliance with the corrective measures by April 12, 2024, stressing that failure to meet the stipulated requirements could lead to further regulatory actions, underscoring the seriousness with which it viewed the breach.

The incident brings to light the challenges facing Nigeria’s electricity sector as well as highlighting the critical need for strict adherence to regulatory orders designed to safeguard consumer’s interests as well as ensure the fair administration of energy services.