On the 26th of July 2021, the Nigerian Electricity Regulatory Commission (“NERC”), acting pursuant to the Electric Power Sector Reform Act (“EPSRA”), issued a Consultation Paper on the Review of Customer Protection Regulations in the Nigerian Electricity Supply Industry (“NESI”).

The aim of the Consultation Paper was to elicit the views of NESI stakeholders in the proposed overhauling of the different regulations which had created various customer rights in the NESI.

The placement of these rights in different NERC regulations, rather than one single document, had created an awareness deficit among customers of the Electricity Distribution companies (“DisCos”), leading to a situation where customer rights were routinely abused by DisCos which took advantage of their ignorance. 

The cries of customers led to the need to enact a comprehensive regulation which consolidates the existing customer rights and streamlines existing enforcement mechanisms in line with global best practices.

There was an equally compelling need to address the concerns expressed by DisCos on finding the right balance between operational efficiency and revenue assurance vis-a-vis the protection of customer rights in the industry.

The result of the wide-ranging consultation process, which drew the input of reputable organisations such as the Nigerian Electricity Consumers Advocacy Network (“NECAN”), PowerupNigeria, EiE Nigeria, and other electricity advocacy initiatives, gave birth to the Consumer Protection Regulations (“CPR”) 2023, which was passed into law by NERC on 29th March 2023.

This article seeks to examine the changes made in the customer protection ecosystem by the CPR 2023.

The views expressed herein are entirely the author’s.

I. Abrogation of existing regulations. 

The CPR 2023 has abrogated the following NERC regulations in their entirety: 

1. Customer Complaints Handling Standards and Procedures 2006

2. Meter Reading, Billing, Cash Collections and Credit Management for Electricity Supplies Regulations 2007

3. Connection and Disconnection Procedures for Electricity Services 2007

4. Customer Service Standards of Performance for Electricity Services 2007

5. Methodology for the Determination of Connection Charges for Electricity Supply Regulations 2012

Some of the rights created in these regulations have been subsumed in the CPR 2023.

II. New conditions for connection, and for disconnection on the ground of non-payment of bills.

Any mention of “the old regulation” in this section refers to the Connection and Disconnection Procedures for Electricity Services 2007. Any mention of “the new regulation” refers to the CPR 2023.

The new conditions for connection and disconnection are contained in Chapter 2 of the CPR 2023, at Sections 9 – 27.

For new connections:

1. A customer requiring connection to their premises shall be responsible for providing connection materials while the DisCo shall be responsible for the connection from the available supply to the customer’s metering point – Section 12(2). This is in addition to other documentation requirements, which remained unchanged from the previous position under the old regulation – see Sections 16 – 19.

Under the old regulation, a customer was only required to pay capital contribution, connection charge, and security deposit.

2. The DisCo shall connect the customer within 48 hours after the customer has provided the requisite materials in the right quantity/quality – Section 13(1)

3. The DisCo shall provide the meter and meter accessories upon connection of the customer – Section 13(2)

4. The DisCo shall not charge any fees for the inspection, survey, testing and commissioning of electricity to the premises of Maximum Demand customers. The DisCo shall bear these charges – Section 14.

For disconnections:

5. A DisCo can only disconnect a customer when the customer fails to pay the amount billed by the payment date stated on the bill or breaches other terms and conditions agreed with the DisCo (this is unchanged from the old regulation). To disconnect based on non-payment, the DisCo must have delivered a bill to the customer and:

·         the payment date for the bill must be clearly stated on the bill;

·         the payment date must be at least 10 days from the date of delivery of the bill;

·         the period from the payment date and date of scheduled disconnection for non-payment should not be less than 2 working days from the date of payment on the bill (under the old regulation, the period was 90 days);

·         the DisCo must confirm from its records that payment has not been made by the customer

The DisCo is no longer required to give written notice of disconnection for 90 days. Once a bill is delivered and is not paid on the date of payment stated on the bill or, at most, 2 days after the date of payment, the DisCo can disconnect the customer without additional notice.

6. Other conditions where a DisCo can disconnect without notice remain unchanged, save for the removal of the notice period for disconnection where the DisCo is not granted access to read a meter located within the customer’s premises. Under the old regulation, a DisCo could only disconnect a customer for lack of access if:

·         a meter located within the customer’s premises is inaccessible for reading within a period of 3 consecutive bills i.e. 3 months due to an act or omission of the customer; and

·         the DisCo has informed the customer by written notice or telephone contact that his meter is inaccessible and requests the customer to provide access and he fails to do so; and 

·         the DisCo gives the customer 10 working days (2 weeks) notice that, unless he provides access, supply will be disconnected.

As an aside, DisCos usually monitor their prepaid customers’ vending patterns. When a customer’s vending drops significantly over a period and the supply availability has been constant, the DisCo puts the customer under surveillance to determine if the premises is vacant. If it is occupied, the premises will be flagged for potential meter bypass and fixed for unscheduled meter inspection.

Under the old regulation, a DisCo who visits such a customer without warning can be denied access by the customer and the DisCo cannot lawfully disconnect such a customer without sending a request for access containing a warning of disconnection if access is not given within 10 working days. By the time this period has expired, the customer would have removed all evidence of bypass.

The CPR 2023 now allows the DisCo to disconnect once a customer refuses the DisCo access to inspect the meter for any reason (of course, in light of the current state of insecurity, the DisCo official must properly identify himself/herself while requesting access).

7. Compensation for wrongful disconnection (Section 26). The financial penalty provisions under the old regulation have been removed. Under the CPR 2023, compensation for wrongful disconnection shall be by energy credits equivalent to a customer’s average daily consumption computed on the basis of his consumption or bills for the preceding 3 months, for each day the wrongful disconnection lasted.

III. Billing changes – Section 29

Any mention of “the old regulation” in this section refers to the Meter Reading, Billing, Cash Collections and Credit Management for Electricity Supplies Regulations 2007. Any mention of “the new regulation” refers to the CPR 2023.

Under the old regulation, the premises was deemed to be the customer of the DisCo, not the owner or occupant of the premises. This led to a situation where DisCos did not develop efficient revenue collection mechanisms, in the belief that because a house cannot run away, any person entering a new apartment will be saddled with the debt of the previous tenants.

The following changes have now been made:

1. A debt left by the previous customer cannot be transferred to a new customer – Section 29(3). The DisCo shall be responsible for recovering the debt left by a previous tenant of any premises.

2. A new customer shall notify the DisCo on the first day of moving into the premises. The customer will only be liable for payment of bills from the date of reconnection (which would be the day s/he moved in) – Section 29(5)

3. The only recognized customer of a DisCo is the registered owner of the property or any person authorized by owner to use and settle electricity bills on the premises – Section 29(6).

4. There is now a clear distinction between the registered owner and customer of electricity for the purposes of billing and settlement – Section 29(7). The registered owner is the person in whose name the electricity bill is written (which is usually the owner of the premises), while the customer of electricity is the occupant of the premises

5. DisCos may now ask only credit metered customers (post-paid billing regime customer) to make security deposits for their future electricity bills – Section 39(1). Under the old regulation, the DisCo may request ANY customer to make a security deposit. In any event, any security deposit shall not exceed the total of the customer’s 2 months’ bill. The DisCo may only request customers with recurring history of non-payment to make such deposits.

6. Section 42 of the CPR 2023 now imposes a responsibility on the DisCo to refund any excess charges levied on a customer via estimated billing. Such excess charges shall be refunded by the next billing cycle.

IV. Customer complaints handling (Sections 43 – 53)

Any mention of “the old regulation” in this section refers to the Customer Complaints Handling Standards and Procedures 2006. Any mention of “the new regulation” refers to the CPR 2023.

The following changes have been made to the complaint resolution process:

1. Complaints, other than those arising from meter accuracy or reconciliation of bills, shall be resolved within 15 days – Section 43(7). Under the old regulation, it was 15 working days i.e. 21 calendar days.

2. Complaints on meter accuracy and reconciliation of bills shall be resolved within billing cycle of one month (30 days) – Section 43(7).

3. If the complaint is not resolved within the first 15 days, the DisCo shall write to the customer to explain the reason(s) for the delay and request for no more than 15 additional days to resolve the issue, except the resolution, by its nature, requires a longer period – Section 43(8).

4. A dissatisfied customer can refer the outcome of the resolution, or the DisCo’s failure to respond to his complaint, to the Forum office at the end of the 30 days period – Section 43(9).

5. If the DisCo or customer is not satisfied with the resolution to a complaint, either party can complain to the Forum office – Section 43(10). They do not have to wait for 15 or 30 days.

6. Membership of the NERC Forum still remains 5 persons, but the categories of appointable persons has been expanded – Section 44(4). Under the old regulation, the Forum was comprised of:

• 1 representative of industrial customers to be nominated by the Manufacturers Association of Nigeria (MAN);
• 1 representative of commercial customers to be nominated by NACCIMA
• 1 representative of household customers to be nominated by the Consumer Protection Council
• 1 representative of an NGO based in the DisCo’s operating area nominated by NERC
• 1 nominee based in the DisCo’s operating area who has an electrical engineering background nominated by NERC

Under the new regulation, the Forum shall be comprised of:

• a lawyer with experience in Alternative Dispute Resolution to be nominated by the Nigerian Bar Association (NBA);
• a financial expert nominated by MAN, NACCIMA or any other reputable organization
• an electrical engineer nominated by the Council for the Regulation of Engineering in Nigeria (COREN) or the Nigerian Society of Engineers (NSE)
• a nominee of the Federal Competition and Consumer Protection Commission (FCCPC)
• a representative of an NGO based in the DisCo’s area of operation nominated by NERC

If these institutions fail to present representation, NERC may nominate alternate representation from other reputable institutions – Section 44(5).

7. Members of the Forum are expressly declared not to be agents, employees or independent contractors of NERC – Section 44(10).

8. Section 4(8) of the old regulation, which provided that no Forum member’s office shall not be kept vacant for more than 2 months, has been dropped from the new regulation. 

9. The Forum now has power to hold meetings/hearings and conduct inspections at any location within the DisCo’s operational area – Section 46(1).

10. The Forum has been divested of jurisdiction to award damages – Section 46(2)

11. The new regulation includes new grounds for removal of a Forum member – Section 45(2), which are:

• where the members exceed their mandate by considering matters that are outside their jurisdiction;
• Where the members issue rulings that are inconsistent with the Act or regulatory instruments of the Commission; or
• where the members continued stay would be inconsistent to the overall objectives of the Forum.

12. A registered consumer organisation or NGO must file a written complaint to Forum along with the customer’s written mandate – S. 49(3). A similar provision was in the old regulation, but it was not stated that the customer’s mandate must be filed along with the NGO’s complaint. It only stated that the NGO shall provide the customer’s mandate without saying WHEN it should be provided.

13. The provision in Section 10(4) of the old regulation that a customer whose complaint is not disposed of within 2 months from the date of his complaint shall be advised of his right to appeal to the Commission was jettisoned in the new regulation.

14. The provision in Section 11(1)(c) of the old regulation, which deals with the kind of relief that the Forum can give, has been expanded from “discontinuing the unfair trade practice or the restrictive business practice or not to repeat them” to “addressing the root cause of hardship”.

15. The provision of Section 11(1)(e) of the old regulation, which provided for award of costs to the complainant, has been removed from the new regulation.

16. Under Section 11(6) of the old regulation, the DisCos were required to report on their compliance with all directives of the Forum, or the reason for any delay in complying with the directives of the Forum, to the Forum. In the new regulation, the reporting requirement has been expanded to include reporting to the Commission as well as the Forum – Section 51(2).

17. Under the new regulation, if a DisCo has not appealed a Forum decision and defaults in complying with the decision within the time stipulated by the Forum, the failure to comply now attracts a penalty of Ten Thousand Naira (NGN10,000.00) per day from the first day of default until the DisCo complies with the decision – Section 53. 

V. Customer Service Standards (Sections 54 – 66)

Any mention of “the old regulation” in this section refers to the Customer Service Standards of Performance for Electricity Services 2007. Any mention of “the new regulation” refers to the CPR 2023.

The changes made are as follows:

1. The old regulation did not provide any definition of a “faulty” meter. The new regulation states that a meter is deemed to be faulty and not in compliance with the Distribution Metering Code (“DMC”) where it is discovered that any part of the metering system fails to comply with the DMC. Where a metering fault occurs, the DisCo shall provide urgent metering services to repair or replace the metering system within 2 working days of being notified of the fault by the customer – Section 62(3).

2. Where a prepaid meter (called a “prepayment meter” in the new regulation) is programmed to operate in credit mode, the customer shall be notified prior to the installation of the meter and the DisCo shall be allowed to recover for the negative meter reading at the next vending – Section 62(4).

3. If a prepayment meter is reading in credit mode without being programmed to do so, and without the knowledge of the customer, the customer shall not be billed for the negative meter reading – Section 62(5). 

4. Where the prepayment meter reads in a credit mode without being programmed to do so and without the knowledge of the customer, the meter shall be considered faulty and shall be replaced in line with the DMC – Section 62(6).

5. Where a prepayment meter is pre-programmed with pre-set energy credit, the DisCo shall inform the customer of the number of energy unit credits to be recovered at the next vending – Section 62(7).

6. All DisCos shall obtain actual readings of all postpaid meters in all supply addresses every month, but not later than once in 3 months. The authorised agent of the DisCo shall, at the time of the meter reading, inspect the premises for possible meter tampering or bypass.

CONCLUSION

While commending the efforts of the Commission in promulgating the CPR 2023, a lot more still needs to be done.

For instance:

1. There are far too many customers complaining about DisCos’ failure to adhere to the 10 working days deadline given under the Meter Asset Provider Regulations 2018 for installation of meters paid for by customers under that regulation. There is no penalty provided for failing to keep to the deadline. Instituting and enforcing a penalty for failing to install the meter within 10 working days from the date of payment by the customer (such as not allowing the DisCo to bill the customer for any electricity supplied from the expiration of the 10 working days till the meter is installed) will compel the DisCos to be more proactive about meeting the statutory deadline.

2. The NERC Forum’s pattern of dispute resolution should tilt more towards arbitration than mediation. Arbitration is adversarial in nature (winner takes all) while mediation is conciliatory (seeks to achieve amicable settlement between contending parties). DisCos frequently delay resolution of simple customer complaints, which ordinarily should not escalate to the Forum, because they know the Forum will not penalise them for their delay or neglect. Damages (or costs of some sort) should be awarded to successful complainants at Forum proceedings.

Suffice it to say that the CPR 2023 is an important piece of subsidiary legislation that will lead to improved consumer awareness of their rights and obligations and, hopefully, engender a better culture of respect of said rights by DisCos.

Emeka Dite A. Ojoko, ACIArb, ABR, AICMC, FIDR
25 April 2023