ELECTRICITY REGULATIONS , RIGHTS AND OBLIGATIONS IN NIGERIA

“And God said, Let there be light: 

and there was light.

And God saw the light, 

that it was good:

and God divided

 the light from the darkness” 

Genesis 1:3 & 4

A. Introduction

There cannot be meaningful creativity and productivity without light energy. This is why we are told that, even in creation the first thing God[1] put in place was light energy. The lack of drive for meaningful creativity and productivity in Nigeria can be traced to inadequate and unreliable electricity power or light to power the Nigerian economy and productive sectors. 

This edition of the Akintunde Esan’s Legal Illumination is focus on the legal, regulatory and operational framework of the electricity power industry as well as the rights of electricity consumers and the obligations of entities in charge of electricity generation, transmission and distribution in Nigeria. There is also illumination on how electricity consumers can seek for redress of the infringement of their rights.

B. Background History

 

Historic milestones in the history of the electricity power sector in Nigeria:

• Electric power generation in Nigeria began in 1896[2], with a 20MW[3] power station installed at Ijora to serve the then Colony of Lagos.

• In 1929, the Nigeria Electric Supply Company (NESCO) was established.

• In 1951, the Electric Corporation of Nigeria (ECN) was established by an Act of Parliament to take over the assets of NESCO and to oversee the electricity power sector.

• In 1960, the Niger Dam Authority (NDA) was set up to build and manage dams in Nigeria, with total installed generation capacity a little above 50MW[4].

• In 1972, ECN and NDA were merged to form National Electric Power Authority (NEPA) which was as from then saddled with the responsibility (monopoly) of running the trio of generation, transmission, distribution and trading of electricity in Nigeria.

• In 2005, as a result of the power sector reform process, NEPA was unbundled and renamed Power Holding Company of Nigeria (PHCN)[5].

C. The Legal Framework - The Electricity Power Sector Reform Act (EPSRA) Cap E7 LFN 2005

 

Prior to the 2005 electricity power sector reforms the statutes regulating the supply of electricity in Nigeria were the following legislations:

• the NEPA Act;

• the NEPA (Amendment) Act No. 29 of 1998.

• the Electricity (Amendment) Act No. 28 of 1998;

• the Electricity Act, cap 106 LFN 1990;

• the Energy Commission of Nigeria Act, cap 109 LFN 1990;

• the Utilities Charges Commission Act No. 104 of 1992.

The Electricity Power Sector Reform Act (EPSRA) Cap E7 LFN 2005 was passed into law by the National Assembly in 2004 but was signed into law by President Olusegun Obasanjo on the 11^th March, 2005. The Act repealed the Electric Act and the Amended National Electric Power Act. The EPSRA was enacted to achieve the following set objectives: 

i.   to provide the formation of companies to take over the functions, assets, liabilities and staff of the National Electric Power Authority (NEPA). 

ii. to develop competitive electricity markets.

iii. to establish the Nigeria Electricity  Regulatory Commission (NERC).

iv.  to provide for the licensing and regulation of the generation, transmission, distribution and supply of electricity.

 v. to enforce such matters as performance standard, consumer rights and obligations.

vi. to provide for the determination of tariffs; and related matters. 

D. Regulatory Authority - The Nigerian Electricity Regulatory Commission (NERC)

 

One of the core objectives of the EPSRA is to establish the Nigerian Electricity Regulatory Commission to serve as an independent statutory regulatory authority to oversee and regulate the electric power sector in Nigeria. The Nigerian Electricity Regulatory Commission was inaugurated on October 31^st 2005. The functions given to NERC under Section 32 of the EPRA [6] are as follows: 

a) Promote competition and private sector participation, when and where feasible; 

b) Establish or, as the case may be, approve appropriate operating codes and safety, security, reliability, and quality standards; 

c) Establish appropriate consumer rights and obligations regarding the provision and use of electricity services; 

d) License and regulate persons engaged in the generation, transmission, system operation, distribution, and trading of electricity; 

e) Approve amendments to the markets rules;

f) Monitor the operation of the electricity; and 

g) Undertake such other activities which are necessary or convenient for the better carrying out of or giving effect to the objects of the Commission. 

In exercise of the Powers conferred by Section 96 (2) (a) of the EPSRA, the Commission makes regulations prescribing all matters which are required or necessary to be prescribed for carrying out or giving effect to EPSRA [7]. Some of the Regulations made to protect consumer right of access to quality of service are:

• Nigerian Electricity Regulatory Commission (Business Rules of the Commission) Regulations

• Nigerian Electricity Regulatory Commission (NERC) MAP Regulation 2017

• Nigerian Electricity Regulatory Commission (NERC) Eligible Customer Regulation 2017

• Nigerian Electricity Regulatory Commission Electricity Industry Enforcement Regulation

• Nigerian Electricity Regulatory Commission (NERC) Consumer Complaints Handling: Standard Procedure, 2006.

E.   Operational Structure

 

The advent of the EPSRA [8] with the intent to ensure adequate, stable and effective electricity supply in Nigeria brought an end to the erstwhile legal regime where only one entity had the monopoly of the generation, transmission and distribution of electricity in Nigeria by creating 18 separate units made up of 11 Distribution companies, six Generation companies and one Transmission company out of the defunct Power Holding Company of Nigeria. 

Electricity Power Sector Reform Act[9] makes it illegal for anyone or company to construct, own or operate an undertaking or business involving “electricity generation”, “electricity transmission”, “electricity generation”, system operation of electricity or the “trading in electricity” without being issued the appropriate license by Nigerian Electricity Regulatory Commission (NERC). 

There are five (5) categories of electricity operators created by the EPSRA referred to as Licensees, these are: 

• Distribution Licensee

• Generating Licensee

• Transmission Licensee

• Trading Licensee

• System Operation Licensee

 

1.   Distribution Licensees - Distribution Companies (DisCos)

 

Distribution Licensees are the eleven (11) Distribution Companies (DisCos) granted Distribution Licenses to deliver electricity to consumers over the electric distribution system pursuant to Section 67. These DisCos are: 

• Kaduna Distribution Company

 

• Kano Distribution Company

 

• Yola Distribution Company

 

• Jos Distribution Company

 

• Abuja Distribution Company

 

• Ibadan Distribution Company

 

• Ikeja Distribution Company

 

• Eko Distribution Company

 

• Benin Distribution Company

 

• Port Harcourt Distribution Company

 

• Enugu Distribution Company

 

Under Section 27 of the EPSRA, eligible consumers are permitted to buy power from licensee other than electricity distribution companies. It should be noted however, that a Distribution License is not required for the distribution of electricity not exceeding hundred (100) kilowatts in aggregate at a site.  

2. Generating Licensees - Generating Companies (GenCos)

 

Generating Licensees are the six (6) Generating Companies (GenCos) granted Generating Licenses to construct, own, operate or maintain an electric power station and to produce electric power at a generating station or from a generating products pursuant to Section 64. These GenCos[10] are: 

• Afam Power Plc - 776 MW (Gas)

 

• Sapele Power Plc - 414 MW (Gas)

 

• Egbin Power Plc - 1,020 MW (Gas)

 

• Ughelli Power Plc - 900 MW (Gas)

 

• Kainji Plant - 760 MW (Hydro)

 

• Jebba Plant - 578 MW (Hydro)

 

• Shiroro Power Plc - 600 MW (Hydro)

 

It should also be noted however, that a Generating License is not required for the generation of electricity not exceeding one (1) megawatt in aggregate at a site. 

3. Transmission Licensee

 

There is only one transmission company managing the electricity transmission network in Nigeria known as the Transmission Company of Nigeria (TCN), it was incorporated in November, 2005 and issued a Transmission License on July 1, 2006[11] and is fully owned and operated by the Federal Government.  

F. Consumer protection 

 

1. Who is a Consumer of Electricity in Nigeria?

 

Generally, a consumer is an individual who purchases, uses, maintains or disposes of products or services[12]. 

An electricity consumer under the EPSRA is specifically “any end-user of electricity who is a customer of a distribution licensee that is not an eligible customer and, for purposes of filing a complaint with the Commission[13] and for any other reason that the Commission may determine, a person who is temporarily disconnected or otherwise without service, provided that a person who has applied for, but has yet to receive, service shall also be deemed to be a consumer[14]” 

The Commission has established the following consumer protection measures:  

· Customer Complaints Handling Standards and Procedures; 

· Connections and Disconnections Procedures for Electricity Services;  

· Customer Service Standards for Distribution companies and Meter Reading;  

· Cash Collection and Credit Management for electricity supply[15]. 

· The Commission’s oversight function is fully operational.[16]

 

2. The General Rights of Consumers

 

a) The right to safety and protection from hazardous goods and fraudulent services or business practices;  

b) A consumer has absolute  right to information,  education of products and awareness to the processes, uses and guidelines to the products and services he is being rendered by manufacturers;  

c) The right of choice is key to a consumer of  product, to enable such consumer to make the right choice from a competitive and predatory market with beaming adverts and prices from a number of products in circulation;  

d) A consumer has the right to be satisfied that the product is of standard quality and also will be of benefit to his basic needs;  

e) A consumer has the  fundamental right of being heard as contained in the constitution as well as redress and compensation whenever his rights are being infringed upon by a  manufacturer or merchant;  

f) Also, a consumer has a right to safe and secure environment from noxious industrial chemicals, pollutants and toxic wastes from manufacturing plants. 

3. Electricity Consumer Rights 

 

It should be noted that without prejudice to the rights of consumers under the Consumer Protection Council Act or any other law in force in Nigeria, one of the objectives of the EPSRA is to enforce such matters as performance standard, consumer rights and obligations further to this objective the EPSRA empowered the Commission to establish appropriate consumer rights and obligations regarding the provision and use of electricity services in Nigeria, thus, pursuant to Section 32 the Commission has set forth consumer rights and obligations as follows:[17]

 

a) All new electricity connections must be done strictly based on metering before connection. That is, no new customer should be connected by a DisCo without a meter first being installed at the premises.  

b) All customers have a right to electricity supply in a safe and reliable manner.  

c) All customers have a right to a properly installed and functional meter.  

d) All customers have a right to properly informed and educated on the electricity service.

 

e) All customers have a right to transparent electricity billing.  

f) All Un-metered customers should be issued with electricity bills strictly based on NERC’s estimated billing methodology.  

g) It is the customer’s right to be notified in writing ahead of disconnection of electricity service by the DisCo serving the customer in line with NERC’s guidelines.  

h) All customers have a right to refund when over billed.  

i) All customers have a right to file complaints and to the prompt investigation of complaints. 

j) All complaints on electricity supply and other billing issues are to be sent to the nearest business unit of the DisCo serving the customer.  

k) If a complaint is not satisfactorily addressed, customers have a right to escalate the issue to the NERC Forum Office within the coverage area of the DisCo.  

l) Customers have the right to appeal the decision of the NERC Forum Office by writing a petition to the Commission.  

m) It is the customer’s right to contest any electricity bill.  

n) Any un-metered customer who is disputing his or her estimated bill has the right not to pay the disputed bill, but pay only the last undisputed bill as the contested bill go through the dispute resolution process of NERC.  

o) It is not the responsibility of electricity customer or community to buy, replace or repair electricity transformers, poles and related equipment used in the supply of electricity. 

4. Obligations of Electricity Consumers

 

a) Pay bills for electricity consumed.

b) Pay security deposit requested by the Disco and other requirements for connection stipulated by NERC.

c) Vigilant protection of Electrical Installations. 

d) Cordiality towards electricity workers.

e) Customer (User) compliance to the requirements of the Distribution code.

 

f) Pay for electricity used within the stipulated time frame. 

g) Ensure receipt of monthly electricity bills if not on prepaid meters and lodge a complaint to the DisCo serving you should you not get your bills. 

h) Ensure that metering and other electrical equipment within your premises belonging to the DisCo not tampered with, or by-passed. 

i) Notify the DisCo serving you of any tampering or bypass of electricity installations.   

j) Notify the DisCo serving you of any outstanding electricity bill before moving into new premises. 

NERC abolished Meter Maintenance Fee on the 11th day of November, 2011, by ORDER NO NERC/11/0002/11, Nigerian Electricity Regulatory Commission abolished Meter Maintenance Fee, (MMF).charged by (DISCOs).

NERC introduced the pre-paid meter policy in 2013 by Order 05 of 2013. This policy was to allow willing customers to pay to the Distribution Companies the cost of the meter which cost, will be discounted from the fixed charge for a duration of 2 years. The meters ought to have been supplied within a period of 45 days from the date of payment. 

Due to the failure of DISCOs to supply meters to all the customers who have paid for them NERC has cancelled the prepayment policy otherwise known as “Credit Advance Payment for Metering Implementation (CAMPMI)” Scheme and has ordered that, customers who have paid for the prepaid meters but were not metered two weeks in excess of the required 45 days should be exempted from further payment of electricity bills[18]. 

G. Platform for the Resolution of Electricity Complaints

 

A consumer or licensee has the right to file Complaints before NERC thus, in exercise of the Powers conferred by Section 96 (2) (c) and (d) of the Electric Power Sector Reform Act 2005 (Act No. 6 of 2005) the Commission has established the platforms and standard procedure for resolution of complaints of electricity consumers in one of its Regulation known as Consumer Complaints Handling: Standard Procedure, 2006[19]. This Regulation creates the Customer Complaints Unit and the Forum Office as a platform for the resolution of the complaints made by consumers. 

1. File Complaint at the Customer Complaints Unit (CCU)

 

A Distribution Company (Disco) is required to establish a functional Customer Complaints Units to receive and resolve all complaints from customers on electricity supply within its area of operation. Complaints are required to be resolved or addressed within 15 working days of the receipt of the complaint by the Distribution Companies after which an appeal can be lodged at the Forum Office. 

This is the first platform where a consumer can lodge a complaint which must be in writing or recorded in writing if the consumer is an illiterate. The Commission monitors all complaints reported to the Discos on monthly basis and analysis the reports to ensure that Discos carry out their responsibilities.[20]

 

2. Appeal to Forum Office 

 

The Forum Office represents the next level that the electricity customers can seek redress from the non-performance of Discos in resolving their complaints. Presently NERC has established at least 1 Forum office in all the Discos to act as an Appellate body in resolving complaints from electricity customers not satisfactorily resolve by the Customer.[21]

 

3. Appeal to the Commission

 

Any customer dissatisfied with the decision of the Forum Office may appeal to the NERC within 10 working days. 

4. The High Court

 

If any question of law arises from the order or decision made by the Commission, the Commission may on its own initiative or at the request of the person directly affected by such order or decision reserve the said question for the decision of the High Court[22]. 

5. Legal Representation

 

A person or company or organization has the authority to authorise a Legal Practitioner to represent him or her or it and act and plead on any proceedings before the Commission. 

H. Criminal Liability

 

Section 94 of the EPSRA provides that: 

1. Any person who contravenes any provision of the EPSRA or any regulations under it commits an offence and is liable on conviction. 

2. Where no specific penalty is prescribed for an offence in the EPSRA the following will apply: 

a) a first offender is liable to a fine not exceeding one hundred thousand Naira or to imprisonment for a period not exceeding one year or to both such fine and imprisonment. 

b) for subsequent convictions, an offender is liable to a fine not exceeding five hundred thousand Naira or to imprisonment for a period not exceeding three years or to both such fine and imprisonment. 

3. An offender shall be liable on conviction to a fine not exceeding one hundred thousand Naira or to imprisonment for a period not exceeding one year or to both such fine and imprisonment where he or she: 

a) fails or refuses to furnish a return or to supply information in the manner and in the time prescribed or furnishes a false or incomplete return or supplies false or incomplete information; or 

b) wilfully delays or obstructs an inspector or police officer in the exercise of the powers or duties conferred or imposed upon him by or under this Act; or 

c) fails or refuses, without reasonable cause, to give information to an inspector or a police officer when required to do so under section 95 or gives false or incomplete information; commits an offence and is Notwithstanding anything contained in any other law, any person who willfully destroys, injures or removes equipment or apparatus of a licensee commits an offence and is liable on conviction to imprisonment for a period of not less than five years and not more than seven years. 

I. Conclusion

 

So many reforms have been carried out by various regimes and administrations in Nigeria, but there seems to be no end to the epileptic power supply, unfair and fraudulent business practices witnessed in the power sector[23]. The nature of the challenges[24] faced by consumers in the power sector such as poor power supply, high electricity tariff, poor metering system, inadequately maintained transformers and cables, power fluctuation and high voltage among others if not adequately addressed by the appropriate authorities will continue to generate both evitable and inevitable disputes between electricity distribution companies (Discos) and the consumers of electricity in Nigeria. 

Fortunately, however there is a statutory process and platform for the resolution of electricity complaints established by the Nigerian Electricity Regulatory Commission (NERC) as discussed in Section G of this Akintunde Esan’s Legal Illumination. Electricity consumers who have electricity power issues with distribution companies (Discos) are advised to take advantage of the said process and platform or contact Akintunde Esan or Ase Olodumare Chambers for further legal illumination on how to seek for redress. 

ELECTRICITY REGULATIONS, RIGHTS AND OBLIGATIONS IN NIGERIA is a legal illumination of AKINTUNDE ESAN known as The LEGAL ADVISER ONLINE. Akintunde Esan is the Managing Partner & Principal Consultant @ ASE OLODUMARE CHAMBERS (Legal Practitioners/Consultants & Chartered Mediators)

Click to also view:

MEANING OF 59 LEGAL TERMS IN NIGERIAN ELECTRICITY LAW

---

[1] The Book of Genesis, Chapter 1 Verses 3, 4  and 5

[2]https://en.m.wikipedia.org/Nigeria_Electricity_Regulatory_Commission(as at 14th July,2018)

[3] Two (2) generatingsets were installed

[4] The Structure of the Nigerian Electricity Supply Industry, on-goingTransformation; Opportunities and Challenges” presented to the Public andPrivate Development Centre, Procurement Monitors Training, 19th to 21st July,2012

a lead paper by Dr. Amadi,Chairman/CEO, NERC

[5] www.nercng.org/index.php/home/nesi/403-generation

[6]Section 32

[7]Section 98Electric Power Reform Sector Act,(EPRA) 2005

[8]  2005 enacted on March 11^th 2005

[9]  2005 enacted on March 11^th 2005

[10] www.nercng.org/index.php/home/nesi/403-generation

[11] www.nercng.org

[12] Consumer Protection Council Act CAP C25   Laws of   theFederation,2004

[13] The Nigerian Electricity Regulatory Commission (NERC)

[14]Section 100 Electric Power Reform Sector Act,(EPRA) 2005

[15]www.nercng.org

[16] infra

[17] Section 32

[18] www.nercng.org

[19] The Response by the Nigerian Electricity Regulatory Commission(NERC) to the Query of the Senate on Fixed Charge, Estimate Billing and SundryIssues.

[20] Infra

[21] Infra

[22] Section 49 Electric Power Reform Sector Act,(EPRA) 2005

[23] Guardian Newspapers, Sunday, August 9,2015, Pages 20 and 21; The Challenges of ConsumerRights in Nigeria: A Case Study in the Telecoms and Power Sector, Ebun-OluAdegboruwa, Esq, August 24,2015 at the Nigerian Bar Association 55^th  Annual General Conference.