FCCPC looks to price caps to prevent excessive billing by DisCos
NEWS DIGEST – There could soon be a billing cap regulation that places a limit on how much electricity distribution companies can charge consumers, Babatunde Irukera, Vice-Chairman of The Federal Competition and Consumer Protection Commission, said on Monday.
The FCCPC told Punch Newspapers it was working with the National Electricity Regulatory Commission to introduce estimated billing caps which would protect unmetered consumers from suffering excessive billing by their DisCos.
“We are trying to hold the DisCos accountable and work closely with the Nigerian Electricity Regulatory Commission,” Mr Irukera said.
“One of the things we believe is that we must find a way to make metering more aggressive and estimated billing less attractive.”
Many years on since the privatization of the electricity sector, DisCos which should provide meters to their consumers have largely failed to do so, preferring to serve high estimated billings to their electricity consumers. Millions of Nigerian households remain without a meter in 2022.
Mr Irukera noted that the commission’s resolve to regulate the charges of power distribution companies is currently challenged by the monopolistic state of the market.
“In a free market, it is the market forces that control prices,” he said. “What the competition regulator does is to regulate those market forces. Essentially, if the market is operating optimally, there will be competition in the market, and there will be innovation and quality.”
At the moment, consumers can neither choose who generates their electricity nor how it is supplied. And pricing is entirely dependent on where the consumer resides and the tariff set by the power distribution company in charge of the region.
This lack of competition, unlike what has become of the soft drink industry, is what Mr Irukera believes to be a problem behind past attempts to regulate the sector.
“That gives you the idea of what happens when the market is working well because the moment you increase the price beyond what people are willing to pay, they will drop off and take the substitutes,” he said.
Still, the commission says it is working hard to resolve complaints despite its past struggles in the sector and the challenges they are faced with.
“There are things that we need to change for the electricity market to change,” Mr Irukera said.
“Some of them include legislation. Some of them include contracts that the Federal Government entered into for a period of time, for which any modification could be considered a breach and potential penalties on the Federal Government.”