Home Business Energy NERC fines Abuja Disco N200m over tariff violation

NERC fines Abuja Disco N200m over tariff violation

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The Nigerian Electricity Regulatory Commission (NERC) has slapped Abuja Electricity Distribution Plc (AEDC) with a fine of N200 million for failing to adhere to its tariff guidelines, and creating a stir among consumers and industry stakeholders alike.

The fine comes in the wake of the Supplementary Order to the Multi-Year Tariff Order for 2024, issued on Wednesday, which AEDC has been found in violation of.

In a detailed correspondence by NERC, it was revealed that AEDC improperly applied an approved tariff increase across all customer bands, contrary to the specific directive that only customers in Band A were subject to the rate hike.

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

The regulatory body’s supplementary order had initially 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. However, AEDC’s misapplication of the new tariffs is said to have 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.

As part of its remedial directives, NERC has mandated 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. This remedial action is expected to be complied with immediately, therefore providing relief to thousands of consumers who were wrongfully overcharged.

NERC’s directive also requires AEDC to present evidence of compliance with these corrective measures by 12th April 2024, emphasising the urgency with which the regulatory body seeks to address and rectify the oversight. Failure to meet these requirements could lead to further regulatory actions, underscoring the seriousness with which NERC is approaching this breach of regulatory compliance.

This incident brings to light the challenges facing Nigeria’s electricity sector, highlighting the critical need for strict adherence to regulatory orders designed to safeguard consumer interests and ensure the fair administration of energy services. As the NERC continues to monitor the situation closely, the outcome of this enforcement action is being watched by industry observers as a test of the regulatory framework’s effectiveness in maintaining discipline and fairness in the country’s evolving electricity market.

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