Covid 19 Pandemic Aggravates the Discontent Between Discos and the Nigerian Electricity Consumers Over Lack of Prepaid Meters and Estimated Billing – Peter Olaoye Olalere

Energy & Natural Resources

28th May 2020

 

Peter Olaoye Olalere, Esq[1]

 

Covid 19 Pandemic Aggravates the Discontent Between Discos and the Nigerian Electricity Consumers Over Lack of Prepaid Meters and Estimated Billing.

 

1. Introduction

Whilst the reform in the Nigerian Electricity Supply Industry (“NESI”) is being deepened, the discontent between the Distribution Companies (“Discos”) and the Nigerian Electricity Consumers over lack of installation of Prepaid Meters and the consequential Estimated Billing system continues to manifest in many ways. This writer did a piece on this subject matter in October 2019 titled “The Current Discontent between the Discos and Nigerian Electricity Consumers over non-Compliance with the Performance Agreement on Metering.[2] Stories of dissatisfaction of 3 customers close to the writer were narrated in that piece, and the conclusion was that all the 3 persons were no longer connected to the Discos’ supply services as a result of sharp disagreement over estimated billing.

Some progress must have been made by the Discos in terms of metering their customers between then and now, and certainly some progress have been made by the Nigerian Electricity Regulatory Commission (“NERC”) in terms of issuing regulatory instrument/legislation to encourage and pressure the Discos to meter their customers. See the writer’s recent article titled: “Covid 19 Pandemic Impacts Full Revenue Recovery Plans As Order On The Transition To Cost Reflective Tariffs In

 

The Nigerian Electricity Supply Industry Is Issued[3] It is disheartening that the lack of prepaid metering and estimated billing of a large segment of the Nigerian Electricity Consumers by the Discos continues to generate high level of discontent even with the advent of the Covid 19 pandemic, and inspite of the legislative instrument, i.e., Order No/NERC/197/2020.

 

2. Recent Manifestations of the Discontent

2.1 Recently, it was reported in the dailies that on Thursday, 24th April 2020 when a staff of one of the Discos went to distribute estimated bills to the customers during this Covid 19 pandemic and lockdown in Abeokuta, Ogun State, the youths of the area simply stoned and beat him black and blue. Although, one cannot excuse the behaviour of the youths, but had the customers been on installed prepaid meters, by which the electricity customers would have paid for electricity before usage, there wouldn’t have been any need to distribute any controversial estimated bills, and the unfortunate incident could have been avoided.

2.2 A second incident on this important downstream sector issue is the judgment of the Honourable Justice A. Adegbehingbe, delivered on 23rd day of April, 2020 in Suit No: AK/94/2019 in the case between Barr. Mike Kpemi and Benin Electricity Distribution Company Plc (unreported).

2.2.1 Facts of the Case

The Claimant’s case was that when he moved into his residence in 2016, he paid, like other landlords of the Estate did, for the procurement of materials to extend the Defendant’s network to his place. At the completion of the network extension work the Defendant requested the registration of all houses in the Estate for the immediate installation of meters which he did and was allotted an account No. 0000626263 with which he applied for a meter. But instead of first installing the meter, the Defendant started billing him for unmetered consumption of electricity.

The Claimant observed unimaginably wide and irreconcilable differences in the consumptions billed by the Defendant from month to month and he lodged the complaint at the Defendant’s Akure office severally. On each occasion, he requested the Defendant to install the metering devise but the Defendant did not give attention to the complaints because the Defendant obviously was benefitting from the non-metering of his house.

The Claimant claimed he became more worried and traumatized by the sudden surge of an alleged consumption for bills from 60 kwh in the month of June 2018 to 400 kwh in the month of August 2018. He made a complaint of it in the Akure office of the Defendant. The Defendant admitted the abnormal increase in the bill and entered into a debt rescheduling agreement with him to clear the debt which the Defendant said was erroneously billed, for the immediate installation of a prepaid meter at his house.  He performed his part of the agreement by paying to the Defendant the purported debt in the sum of N54, 818.64 with the hope that the Defendant would install the meter immediately but unfortunately the Defendant did not, as a result of which he caused a letter to be written to the Business Manager of the Akure Business District of the Defendant. The letter was also not attended to by the Defendant, in disregard of which the Defendant continued its arbitrary billing with unexplainable differences particularly, the consumption for the bill of 125kwh in the month of February 2019 to 340kwh in the month of March 2019. The Claimant alleged that there was no electricity supply to the estate for the entire month of March 2019 due to an alleged fault in the Defendant’s installations supplying electricity to the Estate wherein his house is situate, yet the Defendant billed his house with a consumption of 340kwh (Twelve Thousand, Two Hundred and Eighty Naira).

The Claimant thus sued the Defendant, praying that an Order of Court be made compelling the Defendant to end the arbitrary billing by supplying meter to his residence because it has become windfall from which the Defendant makes gains for services not rendered. The Claimant also claimed that he has suffered stress and psychological trauma and lost sums of money to the Defendant’s arbitrary billings, therefore depriving him from satisfying other competing needs of his home. The Claimant sought general and specific damages, including cost of the action and counsel’s professional fees charged from the court.

The Defendant, on the other hand, stated that it neither refused to meter the Claimant nor is the Claimant being billed outrageously, arbitrarily, unjustifiably and wrongly for electricity consumption. It claimed that the Federal Government introduced free metering policy that made it impossible to meter Defendant’s customers including the Claimant, and later stopped the Credit Advanced Payment Programme Implementation (“CAPMI”) Scheme under which the Claimant would have been metered by the installment payment for the cost of providing and installing a meter. The Defendant insisted that the estimated consumption billing of the Claimant is an approved billing methodology by the Nigerian Electricity Regulatory Commission (“NERC”) for unmetered customers as provided in the NERC’s Methodology for Estimated Billing, 2012 made pursuant to the Electric Power Sector Reform Act 2005 (“EPSRA”).

Hence the estimated electricity consumption billing of the Claimant is based on the availability of supply from the grid, then the supply and consumption of the Claimant measured from the electricity supplied to the feeder on his transformer, multiplied by the approved tariffs relevant to him and added approved taxes like VAT. The Defendant also claimed it never registered Claimant’s premises or any other for the purpose of the immediate installation of a meter but the registration of the Claimant with an allotted Account No 0000626263 was to establish a customer relationship with him as he was then going to be supplied with the Defendant’s electricity. The Defendant stated it does not benefit from the estimated electricity consumption bills of the Claimant. The Claimant’s request for the provision and installation of a metering device was also said not to be peculiar to him and the Claimant has always been informed of the Defendant’s strive to get the Federal Government, through NERC to introduce a convenient metering policy for the investors in the NESI to enable the Defendant meter its customers.

It stated that the Claimant’s letter dated 20/9/18 was written three days after he executed the debt rescheduling agreement on the 17/9/18 to forestall his disconnection and not as a bargain for the immediate installation of a meter. The Defendant claimed that the electricity bills paid by the Claimant hardly covers the huge cost of providing electricity services to him not to talk of a huge wage bill, maintaining and sustaining a complex and expensive electricity network infrastructure and paying the electricity generation companies for energy generated and delivered to the Defendant. It claimed that the Claimant is actually enjoying cheap and affordable Defendant’s electricity energy compared to cost of fuel or diesel to run generators.  The Defendant also sought award of cost of the action i.e. their counsel’s professional fees.

 2.2.2 Decision

After a thorough review of the facts and evidences before it, the Court found that the Claimant has proved his case by showing that the Defendant’s billing of his premises did not follow a particular logic and it is arbitrary. The Claimant also showed by specific evidence that while he had done his own part, the Defendant has failed to do its own part. Even when the Claimant complained to the Defendant, the alleged calculation of the estimated billing was never explained to the Claimant neither was any evidence of same brought to court. The Defendant’s witness admitted that he did not have evidence of how the workings are carried out with him in court, but they exist in the Head Office because they report to that office.

The Court held that the oral explanation offered by DW 1 was both incomprehensible and not pleaded by the Defendant. The evidence derived from the cross-examination of DW 1, was further proof that various sums were inserted in the bills served on the claimant, which the Defendant’s witness could not explain to the Court or provide justification for. Thus, even at the trial, the Defendant did not adduce cogent evidence to dislodge the Claimant’s allegation that there is no method to the bills served on him. The Defendant was thus found not to have disproved the fact that the estimated billing served on the Claimant was arbitrary. It was also held that the Defendant failed its duty to provide meters for the house of the Claimant right from the point of connection of the house to its distribution source which is not to be preceded by payment by the claimant. The Court found that the Defendant admitted it has a duty to supply meters to its customers but that is based on availability of meters.

Relying on the case of Jos Electricity Distribution Company v. John[4] which actually involved a company similar to the Defendant, and with identical duties to the Defendant’s, the court held that it has the powers to issue a prerogative Writ of Mandamus because the Clamant had shown that: (i) he has sufficient legal right to protect and wants specific legal remedy, (ii) he had first and foremost made a distinct demand of the public body (Defendant) to perform the duty in question and that body failed and or refused to do so, (iii) having demanded the Defendant to perform the duty to be performed and the Defendant having neglected to carry out such duty without undue delay in the performance of the reasonably certain public duty, he could approach the court.

The court also found and held that being a customer of the Defendant; the Claimant has a right to demand to be metered. It was the view and holding of the court that the CAPMI, the Meter Asset Provider (MAP) Regulations 2018 (Regulation NERC-R-112) which came into force on 08/03/2018, and the Nigerian Electricity Regulatory Commission (Methodology for Estimated Billing) Regulation, 2012 did not take away the Defendant’s responsibility to provide meter to the Claimant or permit the Defendant to issue estimated billing without a methodology.

In granting the third prayer, the court relied on ‘Order on the Capping of Estimated Bills in the Nigerian Electricity Supply Industry’ promulgated by NERC with effective date as 20/02/2020, by which the previously existing NERC (Methodology for Estimated Billing) Regulation, 2012 was repealed vide paragraph 2 of the new Regulation. By section 5 of that Regulation, the Discos are required to meter customers in accordance with requisite standards of performance. Again, the implication of the new regulation is that it is permitted for a customer not to pay for electricity consumed if he is not metered in some given circumstances. The court stated further, while relying on the case of Bassey v. PHCN & Anor.[5] that the burden placed on the Defendant to establish that the Claimant was owing on the bills or was appropriately billed on the estimation system was not discharged by the Defendant.

In a nutshell, the court declared that the electricity consumption billings of the Claimant’s residence by the Defendant without first installing a meter despite repeated application for same by the Claimant, therefore, causing noticeable periodic unexplainable differences in the bills is arbitrary, unjustifiable, wrongful and illegal.  The Court also ordered the Defendant to immediately install a metering device at the Claimant’s residence, subject to the Claimant subsequently paying rates approved by the NERC for the type of meter installed, where applicable. The Defendant was restrained from billing the Claimant’s residence and from disconnecting the Claimant’s house from the Defendant’s network unless and until a meter is first installed at the house.

 

3. Comments and Conclusions

Certain important points are clearly established by the court’s decision which are worthy of some emphasis. The judgment assures of what to expect when a disgruntled customer of our Discos approaches the court, as the courts are creating the necessary jurisprudence in the NESI. The judgment also clearly places the responsibility of metering consumers where it belongs, which is with the Discos as part of their performance evaluation criteria and irrespective of whatever program/policy under which such meters are installed. Another implication of the judgment is that the Discos are not just contractual parties with the Customers but they are a public body that can be ordered to perform the public duties entrusted to them by the relevant provisions of EPSRA. Also, it is not acceptable for the Discos to just dump estimated bills on the customers and walk away, compelling customers to pay such crazy, unsystematically-estimated and arbitrary bills. Discos must obey all Orders and Regulations lawfully made by NERC and extant as there is no room for them to manoeuvre out of the ones they consider unfavorable. No customer is obliged to pay inflated estimated bills that do not comply with the Order No/NERC/197/2020 – Order on the Capping of Estimated Bills in the NESI. The advantage of increased access of the consumers to prepaid meters is that it aids the Discos in tracking the quantity of electricity distributed and ensures proper accountability as regards revenue generation. Consumers are then assured that the electricity bill accurately reflects their consumption pattern, and that helps in planning.

This writer believes that all hands must be on the deck to ensure customers are metered and the estimated billing system becomes a thing of the past, as metering benefits everyone more and ensures the customer pays for electricity before usage. It will also ensure that the staff members of the Disco are not put at risk for distributing crazy electricity bills during this difficult lockdown period owing to the Covid 19 pandemic.

 

 

For further information on this article and area of law, please contact Peter Olaoye Olalere at: S. P. A. Ajibade & Co., Lagos by telephone (+234 1 472 9890), fax (+234 1 4605092) mobile (+234 815 979 4216) or email (oolalere@spaajibade.com, olaoye.olalere@nigerianbar.org).

www.spaajibade.com

[1]       Notary Public for Nigeria and Senior Associate with the Dispute Resolution Department of S. P. A. Ajibade & Co., Lagos Office, Nigeria.

 

2     Accessible at https://www.mondaq.com/Nigeria/Energy-and-Natural-Resources/854416/The-Current-Discontent-Between-The-Discos-And-Nigerian-Electricity-Consumers-Over-Non-Compliance-With-The-Performance-Agreement-On-Metering

[3]     Accessible at https://www.mondaq.com/nigeria/oil-gas-electricity/921992/covid-19-pandemic-impacts-full-revenue-recovery-plans-as-order-on-the-transition-to-cost-reflective-tariffs-in-the-nigerian-electricity-supply-industry-is-issued-

[4]       (2018) LPELR-46395(CA).

[5]     (2010) LPELR-3859(CA).

 

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