NERC Defends Fixed Electricity Charge

Ijeoma Agudosi/Joseph Bakare

Sam Amadi

The Nigerian Electricity Regulatory Commission (NERC)has come out strongly to defend the fixed charges insisting it is a legal charge that will stay.
Nigerians have condemned the charges calling for its obliteration and the National Assembly recently came out with a resolution seeking its annihilation.

Sam Amadi, the chairman of the commission on Monday claimed that the fixed charges was to recover fixed costs and capital of various operators in the industry.

According to Amadi, Fixed charge that consumers pay is not illegal or necessarily fraudulent. Fixed charges appear in different names in electricity markets across the world.
The difference In Nigeria, is that we do not have a good supply of electricity because of lack of adequate generation capacity. The purpose of fixed charge is to recover capital and fixed costs of the various operators in the industry.
He cited Section 32 of EPSR Act which mandated the commission to approve a tariff that allowed investors to recover their cost with reasonable return on assets invested in the business.

Amadi said that there were investors in the industry who invested their assets on a regular basis and deserve to get returns and explained that the fixed charges was not exclusive to Nigeria alone but the only problem was that due to unsteady power supply, customers would still be charged whether they used power or not.

Therefore, when a customer was connected to the network, investors were required by law to recover their investment whether energy was supplied or not, he said, but however assured that a remodeling was going on to review tariff.

“The re-modelling of the fixed charge is part of the ongoing tariff review process being conducted by the distribution companies and NERC,” he added pointing out that the commission had agreed with the national assembly that customers should be billed individually and not metered jointly to avoid over billing.

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