The Nigerian Electricity Regulatory Commission, NERC, is facing the allegation of conspiring with a property development firm against electricity consumers who pay as much as N150,000 monthly for power in Abuja.
Residents of Emerald Court, a housing estate in Gudu District of Abuja, accuse UAC Property Development Company, UPDC, of illegal generation of electricity, overbilling, disconnection of residents, and failure to separate the public electricity supply from residents’ private lines.
They also accuse the company of violating the Electricity Power Sector Reform Act, EPSRA, 2005, and doing so with the support of the regulator, NERC.
The residents say NERC has refused to sanction UPDC almost a year after clear illegalities committed by the company were reported to it.
At the core of the controversy is that UPDC installed and operated in the estate electricity generating sets with combined capacity of over 1,015 KVA, without an operating license.
As part of its services, UPDC has been distributing the generated electricity to the estate and levying residents arbitrarily bills without providing meters to determine consumption, said Odilim Enwegbara, a resident of the estate.
Each of the 42 flats and five service apartments in the high rise section of the estate are required to deposit N1 million every year to take care of electricity bills, subject to a minimum charge of N150,000 every month, irrespective of consumption, Mr. Enwegbara said who sent a petition to NERC.
UPDC replicates the same practice in all the over 16 residential and commercial properties it currently owns and operates in Lagos, Abuja and Port Harcourt.
NERC wades in
Part IV, Section 62 of the EPSR Act 2005, which sets up NERC, prohibits the generation, distribution and trading in electricity by any person, except in accordance with a licence issued by commission.
Sub-section 62(2) specifically states: “…, a person may construct, own or operate an undertaking for generating electricity not exceeding one megawatt in aggregate at a site or an undertaking for distribution for electricity with a capacity not exceeding 100 kilowatts in aggregate at a site, or such other capacity as the Commission may determine from time to time, without licence.”
Section 62 (5) stipulates: “…any person who contravenes any of these provision “commits an offence and is liable on conviction to a fine not exceeding five hundred thousand Naira, or to imprisonment for a period not exceeding two years , or to both such fine and imprisonment.”
NERC waded in after it received a petition from Mr. Enwegbara, and on March 10, 2016, its officials visited the estate to confirm the allegations.
On April 11, 2016, General Manager (Legal, Licensing and Enforcement Division), Olufunke Dinneh, wrote to UPDC management on NERC’s findings during its visit to the estate.
NERC’s findings, Mrs. Dinneh said, confirmed the allegations against UPDC. Apart from operating two electricity generating units with combined capacity in excess of the one megawatt limit set in the Act, NERC also found UPDC’s electricity distribution within the estate was above 100 KW.
Besides, Mrs. Dinneh said documents reviewed from residents during the visit also revealed the company’s billing system did not conform to NERC’s regulation.
Mrs. Dinneh said an analysis of what UPDC levied Mr. Enwegbara for January 2014 to January 2015 showed grid supply at N32,123.60, generator supply (N178,914.73); VAT (N100,289.97) and service charge (N496,030.96).
“An appraisal of facts from our investigation, vis-a-vis the provisions of the Act, brings us to no other conclusions than that you are clearly in violation of the Act,” Mrs. Dinneh said in her letter to UPDC.
On May 6, 2016, NERC sent a letter to UPDC directing it to desist from its illegal activities and maintain status quo, by collecting only recognised tariff and refrain from illegally disconnecting residents, pending the final determination of the complaint.
Meanwhile, UPDC was served notice to commence enforcement of its rules for violating the Act if within seven days of the receipt of the letter it did not respond to all the issues.
On May 13, 2016, NERC said UPDC requested a meeting with it and the petitioner. At the meeting, UPDC was directed to replace bulk metering with AEDC individual meters to residents within 30 days and report progress to the Commission.
The meeting resolved to carry residents along by copying them in all correspondences between NERC and UPDC till the matter was settled.
On May 27, 2016, NERC said UPDC wrote to request that enforcement action should not commence against it, as it had commenced the process of obtaining a captive generation permit, while a consultant would advise on the separation of grid from private electricity supply.
Curiously, contrary to its resolution during the meeting, Mr. Enwegbara said NERC deliberately refused to inform residents about UPDC’s moves and its decision to grant a six-month extension for the company to comply with its directive.
NERC said during the extension, UPDC would obtain a valid captive power generation permit, provide detailed work plan with specific timelines, stop disconnecting residents and separate public electricity power supply from others.
“The fact that NERC kept residents in the dark about what UPDC was doing only confirms it was more interested in defending and protecting it, to continue defrauding unsuspecting residents of Emerald Court,” Mr. Enwegbara said.
“Let NERC produce a letter it sent jointly with UPDC to Emerald Court residents and the evidence they agreed that extending the timeline would be in their best interest, while stopping the illegal captive electricity generation and distribution would hurt them,” Mr. Enwegbara noted.
He told PREMIUM TIMES residents have good reason to suspect NERC officials compromised their job.
“If NERC officials were not compromised, how come they failed to sanction UPDC for violating the law? Apart from the N500, 000 fine stipulated in the Act for offenders like UPDC, why did NERC not demand the refund of all payments by residents in excess of the legal electricity bills?
“Clearly, NERC allowed UPDC to get away with the fraud, not only in our estate, but in all properties the company runs across the country,” Mr. Enwegbara said.
Mr. Enwegbara, on July 18, 2016, protested against NERC’s decision to grant UPDC operating license.
“My greatest disbelief is that NERC, which as a regulator, should be protecting public interest from the illegal and exploitative activities by private companies like UPDC, is not only (failing) to do so, but in fact providing such public exploiters all the backdoor support to legitimize their exploitation of the unsuspecting public,” Mr. Enwegbara said in a letter to the Commission.
“Why is NERC biased and in a hurry to grant UPDC captive license to legitimize its illegal trading in electricity, but reluctant in stopping UPDC from defrauding its unsuspecting residents,” he added.
He gave NERC seven days to respond or risk legal action. A copy of the protest was sent to the Minister of Power, Works and Housing, Tunde Fashola. The Minister is yet to respond to the letter.
However, UPDC in a letter to all residents last December said the estate was connected to the national grid with a dedicated transformer and skipper panel meter for reading the total power consumption in kilowatts from the electricity distribution company.
To carry out NERC’s directives, UPDC said the 650 KVA generator would be replaced with a 400 KVA generator to avoid violating the law and reduce its total power generation capacity to about 765 KVA, less than one megawatt limit.
The company said the cost of connecting each generating unit to the national grid and each unit having two meters for public and generator power consumption would be borne by each resident.
In its response to PREMIUM TIMES’ enquiry last Thursday, NERC said over 90 per cent of the work on the installation of dual tariff meters had been completed by UPDC, with the entire work to be completed in March.
However, residents told PREMIUM TIMES during a visit to the estate that UPDC had continued to act in defiance of its agreement with NERC.
Although bulk supply meters have been installed about a month ago, the company is yet to connect them to individual premises as directed. Yet, they have continued to levy residents arbitrarily. Those who refuse to pay up are disconnected instantly from public supply.
“The so-called meters were only brought in late last month, while the old fraudulent billing system continues to date. It’s almost one year since the petition was sent to NERC, March 7, 2016. Yet, all the delays have been carefully orchestrated to benefit UPDC, since it continues to send residents the illegal bills,” Mr. Enwegbara said.
When contacted, UPDC representative, Yemi Ejidiran, told PREMIUM TIMES the company had complied fully to NERC’s directives on the issues.
Asked about reports by residents that bulk meters installed at the estate were yet to be connected to individual premises, Mr. Ejidiran said he was not permitted to comment further as the matter was in court.
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