NERC Slams N1.69bn Fine On AEDC For Overcharging Customers

The Nigerian Electricity Regulatory Commission (NERC) has fined the Abuja Electricity Distribution Company (AEDC) to the tune of N1.69 billion for overcharging its customers from January to September 2023.

According to NERC, the penalty arises from AEDC’s failure to comply with the commission’s previous directive on capping estimated billing for electricity consumers.

The fine detailed in ‘Order NERC/2024/114,’ was part of NERC’s September 2024 Supplementary Order, issued on August 30 and signed by its Vice Chairman, Musiliu Oseni and Commissioner for Legal, Licensing, and Compliance, Dafe Akpeneye.

The directive followed an investigation into AEDC’s billing practices, which revealed that customers were overcharged between January and September 2023.

The fine represents 10% of the total overbilled amount.
NERC’s order read, “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.”

NERC also reviewed key indices affecting electricity tariffs for Abuja Electricity Distribution Company (AEDC) for September to December 2024.

The exchange rate of N1,601.50 to the US dollar while the Nigerian inflation rate for July of 33.4% was deployed and a US inflation rate of 2.9% is being used to revise tariff projections.

The review also maintains the January 2024 projection of an average offtake of 611MWh/h for Abuja DisCo.

Additionally, NERC has set the benchmark gas-to-power price at US$2.42/MMBTU and a gas transportation tariff at US$0.80/MMBTU under the Petroleum Industry Act (PIA) 2021.

Following the parameters, the NERC approved an end-user tariff of N117 KWh as the tariff for the period with the cost-reflective tariff being N195 .5 KWh for September.

The Supplementary Order requires AEDC to procure a minimum of 61MW of embedded generation, with at least 30MW coming from renewable energy sources, to enhance electricity reliability within its franchise area.

According to the NERC, the procurement must be completed by April 2025. NERC noted that this step is crucial for AEDC to fulfill its service obligations under the Service-Based Tariff framework.

Additionally, NERC approved new tariffs effective from September 1, 2024, and included provisions for compensating customers for service failures, particularly those on Band A feeders.