ARTICLE
26 March 2024

An Overview Of The Rights And Obligations Of Electricity Customers In Nigeria

Compos Mentis Legal Practitioners

Contributor

Compos Mentis Legal Practitioners
Electricity is an essential resource for the modern man and society. It is for this reason that the industry is highly regulated across the globe.
Nigeria Energy and Natural Resources
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1. INTRODUCTION

Electricity is an essential resource for the modern man and society. It is for this reason that the industry is highly regulated across the globe. Pending when subnational governments will create their respective electricity markets by enacting electricity laws in line with the recent constitutional amendment,1 the Electricity Act 2023 (the EA) remains the flagship law governing the Nigerian Electricity Supply Industry (NESI) – which by extension includes the rights of consumers. In a similar vein, the Nigerian Electricity Regulatory Commission (NERC) is the primary regulator of NESI pending when states establish their respective regulatory authorities. Since electricity is consumed by all and sundry, consumers must be kept abreast of their rights and obligations. It is for this reason that the writers intend to give a brief overview of the rights and obligations of electricity consumers in Nigeria.

2. LEGISLATIVE AND REGULATORY FRAMEWORKS

The key legislations and regulations for this discourse are:

  • the Electricity Act (EA) 2023;
  • the Federal Competition and Consumer Protection Act (FCCPA) 2018;
  • the Customer Protection Regulations (CPR) 2023;2 and
  • The Meter Asset Provider and National Mass Metering Regulations (MR) 2021.

3. RIGHTS AND OBLIGATIONS OF CUSTOMERS

Customers in NESI have several rights that ensure premium services from Discos. On the flip side, no electricity industry can thrive if the customers do not contribute their quota. Therefore, the rights of customers in NESI come with corresponding obligations. Some of these rights and obligations are:

a. The Right to Prompt Connection of Premises to Electricity Supply:

A customer is entitled to a timely connection to his premises to a safe and reliable electricity supply if he so requests. However, this right does not accrue as a matter of course as the customer is required to satisfy some conditions precedent. Generally, the requirements to be satisfied by a customer who wants his premises to be connected to an electricity supply are as follows:3

  1. filing an application in his name in the format prescribed by the Disco;
  2. accepting Disco's terms and conditions for the supply of electricity;
  3. making arrangements for connection of the premises to electricity supply in compliance with the CPR 2023;
  4. providing the Disco with acceptable means of identification and information necessary for the supply of electricity to the premises; and
  5. providing the connection materials in accordance with standards approved by the Disco.4

Where a customer has met the aforementioned requirements, the Disco shall effect the connection of supply to his premises within 48 hours.5 However, it should be noted that the connection materials that are provided by the customer become the property of the Disco from the moment that they are integrated into the Disco's network.6

b. Protection from Arbitrary Disconnection of Electricity Supply:

The law frowns at every form of arbitrary disconnection of a customer's premises from electricity supply, and failure to strictly abide by the procedures outlined in CPR 2023 before disconnection is effected entitles the affected customer to compensation from the offending Disco. There are two types of disconnections, namely: disconnection with notice and disconnection without notice.

Generally, a Disco may only exercise its right of disconnection due to the failure of a customer to pay a bill which has been duly served on him after clearly stating the payment date on the bill. Furthermore, not only must the payment date be at least 10 days from the date of delivery of the bill to the customer, but the period between the payment date and the date of scheduled disconnection for nonpayment should not be less than two working days after the payment date. The Disco is further required to verify from its records that payment has not been made by the customer before disconnecting the customer's premises.7 It should be noted that any bill correcting a previous inaccurate bill shall have a payment date which is at least 10 working days from the date of delivery of the corrected bill to the customer.8

However, it is not in all cases that a customer is entitled to notice of disconnection before a Disco disconnects his premises from the electricity supply. Disconnection may be carried out by a Disco without giving a prior notice to a customer where the customer is connected to the Disco's network in an unauthorized manner; the customer's connection is considered to be dangerous to the integrity of the network and/or affects the quality of supply to other customers; or the Disco is not granted access to read a meter that is located within the customer's premises.9

What is more, a customer who is indebted to a Disco is protected from having his premises disconnected from the electricity supply where he has entered into a payment arrangement with the Disco and payments are being made in accordance with that arrangement.10 A Disco is also estopped from exercising its right of disconnection against a customer that has filed a complaint on the unpaid bill in accordance with NERC's customer complaints procedure and the complaint remains unresolved.11 Finally, it is also unlawful for a Disco to disconnect a premises when it is aware that a life support machine is in use.12 However, customers that have life support machines installed at their premises are obligated to enter into an acceptable agreement with the Disco for settlement of their bills and the Disco may explore other legal means to recover any debt due from this category of customers.13

Any form of disconnection that is contrary to the provisions of CPR 2023 as itemized above is a wrongful disconnection.14 Some common examples of wrongful disconnections are:

  1. Disconnection done as a retaliation for assault on or hostility against the staff of a Disco. In Amadi & Ors v Essien,15 such disconnection was held to have been carried out in utter bad faith and with malice. The court held that such cases are matters for the police to handle and disconnection was not the remedy.
  2. Disconnecting an innocent customer due to the infraction(s) of another customer. For instance, it is common practice for Discos to disconnect entire communities either because of indebtedness or other perceived wrongs committed by some members of such communities. They do this without considering the interests of innocent customers. It is submitted that such conduct offends the doctrine of privity of contract. Further, the practice of enforcing the outstanding electricity bill of a former landlord or tenant against a new landlord or tenant is expressly outlawed by the EA.16

Customers who are victims of wrongful disconnection are entitled to compensation from the defaulting Discos. This compensation is in the form of energy credits that are equivalent to their (affected customers') average daily consumption computed based on their consumption or bills for the last 3 months, for each day that the wrongful disconnection lasts.17

c. Right to Accurate Billing:

Overbilling is one of the measure challenges that electricity consumers, particularly unmetered consumers, in NESI, contend with. In February 2024, NERC disclosed that millions of unmetered electricity customers were overbilled to the tune of over N105 billion between January and September 2023.18 Overbilling is a breach of consumer rights because an electricity bill should be a true reflection of the actual electricity usage of the customer in the billing cycle. Ideally, this is obtained through an accurate reading of the customer's electricity meter.19 However, where there is no electricity meter to record electricity usage at the supply address of a customer, a Disco shall base the bill of the Customer on an estimated energy consumption which shall be calculated in accordance with a method approved by the Commission.20 Where it is established that the Disco has failed to comply with the approved billing methodology, such Disco shall refund the excess amount charged in the next billing circle.21

d. Right to Request a Review of Bill:

A customer who is aggrieved with the electricity bill that is served on him may request a review of the said bill and the Disco is required to comply.22 Where the review shows that the customer was overcharged, the Disco shall amend the bill according and, within five working days of becoming aware of the error, advise the customer in writing, and it shall repay the amount by crediting the exact amount overcharged to the customer's next bill.23 Conversely, where a Disco has undercharged or not charged a customer, it shall be entitled to recover the amount of the undercharge from the customer provided that the Disco notifies the customer in writing of the error that led to the customer being undercharged or uncharged and the amount of the undercharge or charge.24

e. Metering:

Estimated billing is inefficient as it subjects customers to a situation where they have to pay for electricity that they never consumed. Over the years, NERC has come up with policies and frameworks to close the metering gap in NESI. However, a majority of customers are still unmetered largely due to the liquidity crisis in the power sector. One of the interventions of NERC in this regard is the Meter Assets Providers (MAP) 2018 Framework. By this framework, a customer who wishes to be metered timeously may apply for a MAP meter by making an upfront payment, and the Disco is to confirm the customer's premises readiness for metering within 10 days of the application.25 The meter asset provider is thereafter obligated to install the meter within 10 days of being notified of payment and Disco's confirmation that the premises are ready for metering.26 Where the meter asset provider fails to effect the installation within 10 days, the Disco is to provide the meter within 10 days of being notified of the meter asset provider's failure to install the meter.27

It is noteworthy to mention that Discos are under an obligation to reimburse customers who pay for meters under the MAP framework through equal instalments of energy credits at the time of vending, with the cost of the meter amortized over a maximum period of 36 months.28 Further, the billing of customers shall be strictly based on their consumption pattern in the last billing cycle or the existing energy cap of the load cluster, whichever is lower where a Disco fails to repair or replace a meter within 2 working days of receiving the customer's complaint.29

f. Right to Prompt Resolution of Customer's Complaint:

The Customer Service Standards issued by NERC generally set strict time frames within which Discos are to address customers' complaints. For instance, a fault resulting in a power outage should be resolved within 24 hours of the customer's complaint (48 hours at most) safe for exceptional cases where it will be reasonably impossible for the requisite task to be performed within the required time frame.30 The crux of the Customer Service Standard section in CPR 2023 is that customers' complaints should be addressed without undue delay. However, Discos often treat customers' complaints with levity, probably because they do not have competitors in their respective franchise areas. Not only does this lackluster attitude offend the CPR 2023, it may also amount to an abuse of dominant position contrary to section 72 of FCCPA.

In any case, to enhance the speedy resolution of customers' complaints, the CPR 2023 has set out complaint handling mechanisms which can be summarized as follows:

  1. Discos are to establish customer complaints units (CCU) across all their operational areas to ensure ease of access to all customers, and aggrieved customers are to lodge their complaints at the CCU closest to them.
  2. Such complaints are to be resolved within 15 days but not later than 30 days except if the complaint is of such nature that requires a longer period (e.g. construction works).
  3. Where a customer is dissatisfied with the outcome or there is a deadlock, either party may escalate it to the Forum Office established by NERC across the Federation.31
  4. Complaints are to be resolved by the Forum not later than 2 months from the date of receipt.32
  5. Any party that is dissatisfied with the decision of the forum may file an appeal to NERC within 10 working days. Note that NERC may entertain complaints filed out of time, and generally, there is no timeline within which it must make a decision.33

Note further that the final decisions of NERC are appealable to the Federal High Court.34

4. WHO HAS THE LOCUS TO FILE A COMPLAINT OR AN ACTION?

The CPR 2023 appears to recognize only the registered customer, as it defines a customer in paragraph 8(2) as any person registered by the Disco for the contracted supply of electricity to the person's premises. Thus, ideally, the proper party to file a complaint or an action against a Disco is the person who contracted with and is registered by the Disco. Nevertheless, on the strength of the decision of the Court of Appeal in Amadi & Ors v Essien (supra), an occupier can sue as a disclosed principal of the registered customer, especially if the Disco has been dealing with him (the occupier). The rationale for this is that agency is one of the exceptions to the doctrine of privity of contract.

5. CONCLUSION

The writers have provided an overview of the rights and responsibilities of consumers in the Nigerian Electricity Supply Industry (NESI). It is important to note that Discos (Distribution Companies) who fail to comply with the Electricity Act and its relevant regulations may face penalties. On the other hand, consumers must be aware that electricity access comes at a cost, and therefore, they must always be prepared to fulfill their obligations.

Footnotes

1. See Item 14(b) Part II of the Second Schedule of the Constitution of the Federal Republic of Nigeria 1999 (CFRN), as amended by the Fifth Alteration (No.17) Act 2023.

2. NERC amended and consolidated its regulatory instruments on the protection of customers on 29 March 2023.

3. Paras 16 & 18 CPR 2023.

4. Para 12(2) CPR 2023.

5.Paras 13(1) & 17(1)(b) CPR 2023.

6. Festus Okechukwu Ukwueze and Peace Chiedozie Onubuleze, 'Appraisal of the Protection of the Rights and Interests of Electricity Consumers in Nigeria' (2019) 29 Journal of Law, Policy and Globalization 137, 143, citing M. L. Agama, 'Highlights of Consumer Rights Under the Nigerian Electricity Supply Industry' (2016) 3(3) Capital Territory Law Review 25 (https://www.bing.com/search?pglt=41&q=Appraisal+of+the+Protection+of+the+Rights+and+Interests+of+Electricity+Consumers+in+Nigeria&cvid=84cfee121b44429bada7b0d6e4243105&gs_lcrp=EgZjaHJvbWUyBggAEEUYOdIBCDEyODZqMGoxqAIAsAIA&FORM=ANNTA1&PC=U531) accessed 18 March 2024.

7. For these propositions, see generally section 115 EA and para 20 (1) & (2) CPR 2023.

8. Para 20(3) CPR 2023.

9. Para 21 CPR 2023.

10. Para 25(1)(b) CPR 2023.

11. Para 25(1)(c) CPR 2023.

12. Para 25(2) CPR 2023.

13. Ibid.

14. Para 26 CPR 2023.

15.(1993) LPELR-14644(CA).

16. Section 115(4).

17. Para 26 CPR 2023.

18. Okechukwu Nnodim, 'Discos overbilled 7.1million customers in nine months – FG' (The Punch, 12 February 2024) (https://punchng.com/discos-overbilled-7-1million-customers-in-nine-months-fg/) accessed 18 March 2024.

19. Para 28 CPR 2023.

20. Para 35 CPR 2023. See also the Amended Orders on the Capping of Estimated Billings for the various Discos.

21. Para 42 CPR 2023.

22. Para 36(1) CPR 2023.

23. Para 36 (6) & (7) CPR 2023. See also para 42 CPR 2023.

24. Para 36(8) CPR 2023.

25. Para 21(1)(g) MR 2021.

26. Para 23(1) (f) MR 2021.

27. Para 21(1)(h) MR 2021.

28. Para 22(1)(j)(k) MR 2021. See also para 24(1)(b)(c) MR 2021.

29. Para 21(1)(f) MR 2021. See also para 24(1)(d) MR 2021.

30. Para 61 CPR 2023.

31. See generally para 43 CPR 2023 for these propositions.

32. Para 50(2) CPR 2023.

33. Para 52 (1) & (2).

23. Section 51(2) – (5) EA 2023.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

ARTICLE
26 March 2024

An Overview Of The Rights And Obligations Of Electricity Customers In Nigeria

Nigeria Energy and Natural Resources

Contributor

Compos Mentis Legal Practitioners
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