Electricity distribution companies (DisCos) across Nigeria have raised serious concerns over what they describe as a growing culture of bill non-payment by customers in several states, blaming this development on the recent unilateral tariff reduction by Enugu DisCo.

Speaking through the Association of Nigerian Electricity Distributors (ANED), the umbrella body for all 11 DisCos in the country, Sunday Oduntan, the executive director of ANED, expressed frustration over what he called ?an emerging pattern of resistance? among electricity consumers in states outside Enugu.

According to Oduntan, some customers outside Enugu State have begun to demand similar tariff reductions, while others have refused outright to settle their electricity bills, citing perceived injustice and inconsistency in tariff regimes across the country.

Uncoordinated tariff review sparks backlash

The controversy began after the Enugu State Electricity Regulatory Commission (EERC) announced a significant reduction in electricity tariff for Band A customers, from the national average of over N200/kWh to N160/kWh, without coordination with the Nigerian Electricity Regulatory Commission (NERC) or other key players in the power sector.

Since the announcement, DisCos in other regions have reported mounting pressure from customers demanding similar tariff relief. In some instances, customers have gone as far as suspending payment of their electricity bills, awaiting a similar reduction.

?Customers in other states don?t want to pay bills,? said Oduntan. ?They are pointing to Enugu and saying if their tariffs can come down, why should ours remain the same??

Tariff reductions

The controversial decision by Enugu DisCo has put DisCos in other states under intense scrutiny, with many state governments and consumer groups now pushing for similar reductions.

Although ANED insists that the Enugu model is not scalable nationwide due to the complexity of the national electricity market and the role of various federal agencies in tariff setting.

BusinessDay?s findings showed the Enugu tariff cut emerged from a rare and rigorous process initiated by MainPower Electricity Distribution Limited, the local operator in the state, and supported by the state government. Initially proposing a tariff of N209/kWh, MainPower was instructed to revise and submit verifiable data to justify its cost structure.

After multiple engagements and a granular cost verification process, which included validating employee headcounts, asset inventory like transformers, and administrative overheads, the tariff was reduced to N125/kWh, before settling at N160/kWh as a compromise.

?For the first time since 2014, a DisCo was made to provide actual, verifiable data,? said an industry source familiar with the Enugu negotiations. ?The process didn?t tamper with the federal component of the tariff, generation and transmission, but focused only on the distribution segment, which is where MainPower operates.?

Customers? anger & DisCos? Dilemma

Meanwhile, customers across other states have reacted angrily, with many accusing DisCos of profiteering and inefficiency. In some urban centres, customers have taken to social media and community forums to declare boycotts of bill payments until their state replicates Enugu?s N160/kWh benchmark.

?We won?t keep paying N210 or N225 per kWh while Enugu pays N160,? said Chimaobi Nnaji, a resident of Owerri. ?What magic did they do there that our own DisCo can?t do??

However, DisCos insist they are not magicians and that tariff reviews must be based on empirical data, not populist demands.

?We are open to tariff reductions?who wouldn?t be? But they must be data-driven and fair,? Oduntan reiterated. ?The electricity we distribute is generated and transmitted at a cost. When customers refuse to pay, they are undermining the sustainability of the entire value chain.?

Where is NERC?

The silence of NERC, Nigeria?s apex electricity regulator, has further complicated matters. Industry observers said the Commission has failed to enforce regular five-yearly tariff reviews, last conducted in 2014. A planned 2019 review was skipped, and the 2024 deadline has also passed without implementation.

This regulatory vacuum has left states like Enugu to act independently, albeit within the confines of the NERC tariff methodology, which was used but independently verified in Enugu.

?Enugu didn?t create a new method,? said a source in the ministry. ?They simply did the job that NERC was supposed to do,verify costs and ensure that tariffs are based on actual service delivery, not inflated numbers.? (BusinessDay)

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