Chineme Okafor in Abuja
Again, the Nigerian Electricity Regulatory
Commission (NERC) has provided a strong
defence for its inclusion of the fixed charge
component in the electricity rate paid by
consumers in Nigeria.
NERC said on Monday that the fixed charge
component in the monthly bills of consumers was
not illegal and fraudulent as stated by members
of the country’s Senate last week.
As against the request of the senators, NERC also
stated at a meeting with journalists in Abuja that
if it decides to abolish the fixed charge
component from the tariff charged by the
electricity distribution companies (Discos), the
impacts on the country’s emerging electricity
market could be harsh, especially with
investments to upgrade the system.
The Chairman of NERC, Dr. Sam Amadi said while
responding to the query issued to the commission
by the Senate, that in as much as the charge
remains a standard industry practice across the
globe, the case of Nigeria is however judged by
the legacy problem of poor electricity generation
capacity.
The senators had in the query asked NERC to
explain the basis for the Discos’ inclusion of a
monthly average fixed charge of N702 in the
electricity bills of domestic consumers and others.
They also requested for clearer explanation on the
practice of estimated electricity billing as well as
payments made by consumers for meter
installation at their residences.
Amadi in this regard said that both fixed and
energy charges are components that make up
the monthly electricity bills of consumers. It
however noted that the fixed charge was
inputted to help operators in the sector prudently
recover the capital and fixed cost investments
they have made in the sector.
He noted that fixed charge was not tied to
electricity consumption by consumers, adding
that with it, the market pays power generators
their capacity charges to cover for their capital
cost, fixed operations, maintenance cost and two-
third of tax cost.
“NERC respectfully argues that the fixed charge
that consumers pay in the electricity market is
not illegal or necessarily fraudulent,” Amadi said.

www.thisdaylive.com/articles/power-fixed-charge-not-illegal-fraudulent-nerc-tells-senators/217713/

They should reduce it na.