Curbing Criminal Extortion by Discos
With the recent mind-boggling revelations, it is obvious that electricity distribution companies set huge monthly revenue targets and arbitrarily slam exorbitant estimated bills on consumers to achieve their targets without commensurate electricity supply
A high point of the presentation of the petitions was the case of a young lady, who occupy three-bedroom flat with her mother and brother but was slammed N20, 000 estimated bill by Ikeja Electric in the first month, N70, 000 in the second month, N150,000 in the third month, N300,000 in the fourth month and N450,000 in the fifth month
It was a tale of woes in Lagos recently as helpless electricity consumers relived their pains in the hands of electricity distribution companies in the country. Since private investors took over the power assets on November 1, 2013, consumers are worried that electricity has become the only commodity in Nigeria that the seller stripes the buyer of any bargaining power and sits at the comfort of his office to decide the price to be paid by the buyer, without any regard to the quantity of goods supplied.
This unilateral determination of electricity bills through arbitrary estimation by the distribution companies defies all known rules governing commercial transactions, and supplier, customer relationship.
Mind-boggling revelations at a recent interactive session organised in Lagos by the House of Representatives’ Ad-hoc Committee on Electricity Customers’ Complaints showed that a modest three-bed room apartment where pre-paid customers pay N2,500 –N4,000 monthly, attracts an average estimated monthly bill of between N7,000 and N25,000 in the franchise area of the same Disco, depending on the mood of the Disco official assigning the bills and the revenue target of the company for the particular month.
Apparently miffed by the unjustifiable estimated bills slammed on electricity consumers by electricity distribution companies in the country, the Leader of the House of Representatives, Hon. Femi Gbajabiamila (APC, Lagos), recently initiated a bill to criminalise such billing methods and save helpless electricity consumers.
Gbajabiamila had noted that the bill would permanently address nationwide complaints by consumers, who have also alleged that apart from the criminal extortion of the consumers through estimation of bills, the unfavorable technical manipulation of the reading pattern of existing pre-paid meters has also led to incommensurate calculation of electricity purchased and consumed by customers.
The media aide to the House Leader, Mr. Olanrewaju Smart reportedly said the bill became necessary following several complaints from constituents across the country over the highhandedness of the electricity companies.
The bill seeks to amend the Electric Power Sector Reform Act of 2005, by creating new sections 68 to 72 to outlaw the estimated billing methodology. The bill provides that the Electricity Distribution Company shall within 30 days of receiving the application and payment for meter by a customer, install the pre-paid meter applied for in the premises of the consumer.
Subsection of the new Section 68 empowers electricity consumers to ignore paying estimated bill and also exempts from electricity disconnection in the event that no pre-paid meter was issued to them by their power distribution company within 30 days. Also, the newly introduced Section 69 of the 2018 Electric Power Sector Reform Act (amendments bill) is poised to address the alleged technical manipulation of the reading pattern of the existing pre-paid meters and unknown tariff methodology. The bill further recommends imprisonment of six months for officials of relevant Disco found guilty of illegal disconnection, refusal of the disco to connect a customer after application, un-metering within 30 days of a customer applying for a pre-paid meter and issuance will of estimated billing.
Failure of some private investors One of the reasons the federal government had canvassed to sell the power assets to the private investors was that privatisation would liberalise the power sector and reduce tariffs as in the case of the telecommunication sector where similar liberalisation reduced the billings for airtime and also reduced the cost of GSM line from N30, 000 to N200.
The promoters of the power privatisation had also argued that electricity customers would have many choices as in the telecommunication sector where an aggrieved MTN customer can change his or her line to Glo.
But nearly five years after the power assets were handed over to the private investors, consumers are now paying more than triple the actual price to the Discos for supplying darkness without being given any choice to change from Disco A to Disco B as in the telecom sector.
Customers that are worst hit by this criminal extortion by some of the Discos are those without pre-paid meters who are arbitrarily assigned very exorbitant estimated bills without commensurate supply of power. Revelations at the House of Representatives’ interactive session showed that even pre-paid customers are not safe as the Discos allegedly manipulate the smart meters from their offices to enhance speedy exhaustion of the power purchased by the consumers.
Criminal extortion by Discos In their petitions to the Hon. Isreal Ajibola Famuyiwa-led House of Representatives’ Ad-hoc Committee on Electricity Customers’ Complaints, the representatives of electricity consumers in the South -West geopolitical zone expressed frustrations over the outrageous bills by the Discos. The committee was inundated with complaints over outrageous billing system, poor customer service and the inability of Discos to meter households. The consumers, who unanimously urged the federal government to cancel the power privatisation, also slammed the Nigerian Electricity Regulatory Commission (NERC) over its failure to effectively police the power sector.
The consumers said the impunity displayed by the Discos and their flagrant abuse of NERC guidelines on estimated billings, stemmed from the failure of the regulatory agency to perform its oversight functions.
The power consumers warned that if the federal government failed to resolve all customer complaints, a massive movement of angry and exploited consumers would resort to self help. The Chairman of Magodo GRA Phase Zone 1 Gateway Community Development Association, Mr. Bode Ojomo told the committee members that there would have been a breakdown of law and order if the House of Representatives had not set up the committee.
He called on the federal government to probe the Discos over the crazy bills they slam on their customers.
Tale of woes Ojomo alleged that the Discos are in the habit of setting outrageous monthly revenue targets and arbitrarily imposing them on electricity consumers without supplying electricity to justify the bills. Ojomo said his CDA had written several letters to Ikeja Electric on the issue of excessive charges levied on residents of the estate through unjustifiable estimated billing but the company had remained adamant.
According to Ojomo, the CDA also pleaded with the company to install pre-paid meters in the area but the company refused.
“All our efforts have not yielded any respite as Ikeja Electric keeps piling us with excessive estimated billing, which has been increasing on a monthly basis,” he said.
He accused the company of extorting N10, 000 – N20,000 monthly from customers when actual consumption is below N5,000 monthly.
“When the Discos charge of N10,000 – N20,000 unjustly and you go and complain, they will ask you to pay first so that they will look into it and that will be the end of the story,” he said. “If the House of Representatives did not embark on this exercise, there would have been anarchy. Nigerians are being driven to anarchy by the Discos. In my estate, they charge consumers N10,000 – N12,000 monthly for darkness. We need a holistic review of the Discos. Each of them set a monthly revenue target of let us say, N2 billion. Assuming pre-paid customers pay N500 million, they will share N1.5 billion arbitrarily to the other customers on estimation. The Discos are fraud; the National Assembly should outlaw estimated billing,” Ojomo explained.
A high point of the presentation of the petitions was the case of a young lady, who occupy three-bedroom flat with her mother and brother but was slammed N20, 000 estimated bill by Ikeja Electric in the first month, N70, 000 in the second month, N150,000 in the third month, N300,000 in the fourth month and N450,000 in the fifth month. The young lady, who submitted copies of the bills to the committee, also alleged that even when she angrily asked Ikeja Electric to disconnect her premises, the company still sent her a total of N216, 000 estimated bills for the six months she was disconnected.
On their part, Olowogbowo CDA, represented by its Secretary, Mr. Bello Abdulwasiu, said the group has been inundated with series of complaints from residents over astronomical increases in electricity billings by Eko Disco and urged the committee to prevail on the company to provide them with pre-paid meters. Also, the Chairman of Ekiti Landlord and Landladies Electricity Consumers Association, Dr. Ibukun Ogundipe told the committee that the people of Ekiti are having a running battle with Benin Disco over exorbitant electricity bills. “When we wanted to demonstrate, the Commissioner of Police invited us to a meeting. At the meeting, Benin Disco promised to get back to us but they never did. There are no pre-paid meters in Ado Ekiti and Benin Disco sends us obnoxious bills. Before Benin Disco came on board, maximum consumption of a customer was 150 kilowatthour but when Benin Disco came, the company hiked the bills to 300 -450 kilowatthour. It was after our demonstration that they admitted that their bills are based on estimation. Someone was paying N2,000 before and you now increased it to N10,000 when there is no power supply,” Ogundipe explained.
“Our association is now registered with CAC; we are no longer an amorphous association and we will drag Benin Disco to court. In Ekiti, we buy transformers and when we ask them to install it, they will ask us to pay for the installation. The only solution is pre-paid meter,” he added. Speaking to journalists during the interaction, Hon. Famuyiwa said public grievances against the Discos had reached a level that if the House of Representatives did not act fast, it would lead to a breakdown of law and order.
“The House in its wisdom, constituted this committee to interface with the consumers, the Discos and the Nigerian Electricity Regulatory Commission (NERC) to find lasting solutions to all the problems facing the consumers……… At the end of this exercise, we are going to write a report and we are going to look at the laws guiding the sector. If we need to replace some laws, we will do that; if we need to amend some laws, we will amend them. We will do anything within the legislative framework to protect the interest of Nigerians,” he explained.