The Nigerian Electricity Regulatory Commission (NERC) has imposed a substantial fine of N1.69 billion on the Abuja Electricity Distribution Company (AEDC) for overbilling its customers.
This penalty, outlined in Order NERC/2024/114 and issued as part of the September 2024 Supplementary Order, reflects the commission’s response to AEDC’s failure to adhere to regulatory standards.
The regulatory document, dated August 30 and signed by NERC Vice Chairman Musiliu Oseni and Commissioner for Legal, Licensing, and Compliance Dafe Akpeneye, was published on NERC’s website on Thursday. The fine is based on AEDC’s non-compliance with NERC’s earlier directives on capping estimated billing, a measure intended to protect consumers from inflated charges.
Following a detailed investigation into AEDC’s billing practices, NERC discovered that the company had overcharged its customers from January to September 2023. As a result, the commission has levied a fine equivalent to 10 percent of the total overbilled amount. This sanction is outlined in the September 2024 Supplementary Order to the Multi-Year Tariff Order 2024 for AEDC, which also includes adjustments to the company’s revenue requirements and tariffs.
The commission has decreed that N1.69 billion will be deducted from AEDC’s annual operating expenditure starting September 2024 as a direct consequence of the overbilling. This penalty underscores NERC’s commitment to enforcing compliance and addressing consumer grievances.
In addition to the financial penalty, NERC has mandated several measures to improve AEDC’s service delivery and compliance with service-based tariffs. AEDC is required to continuously monitor its service levels, particularly for electricity supply to Band A feeders. Should AEDC fail to deliver the committed service levels for two consecutive days on a Band A feeder, the company must publish an explanation on its website by 10 a.m. the following day.
The Supplementary Order also stipulates that AEDC must procure a minimum of 61 megawatts (MW) of embedded generation capacity, with at least 30 MW sourced from renewable energy, to enhance the reliability of electricity supply in its service area. This procurement must be completed by April 2025. The measure is part of NERC’s strategy to ensure AEDC meets its service delivery commitments under the Service-Based Tariff framework.
Furthermore, new tariffs, effective from September 1, 2024, have been approved by NERC. The order includes provisions for compensating customers affected by service failures, particularly those on Band A feeders. AEDC is required to provide appropriate compensation to customers who experience service disruptions, with specific guidelines outlined in Appendix 3 of the order.
The Supplementary Order will remain in effect until a new tariff review is conducted, reinforcing NERC’s role in ensuring that electricity distribution companies adhere to regulatory guidelines and protect consumers from unfair billing practices.
