Breaking Down NERC’s Revised Order on Unauthorized Access, Meter Tampering, and Bypass

INTRODUCTION

The Nigerian Electricity Regulatory Commission (NERC) issued an Amended Order on Unauthorized Access, Meter Tampering, and Bypass (ORDER NO: NERC/2024/148) that took effect on January 22, 2025. This order revised a previous order from 2017 (Order No.: NERC/REG/41/2017) and is pursuant to the Electricity Act 2023, which empowers the Commission to make regulations that give effect to the Act. The primary objective of this amendment was to address the increasing incidents of unauthorized access to electricity supply, meter tampering, and bypass, while also establishing clear guidelines for the reconnection of unauthorized connections.

OVERVIEW

1. Reconnection Conditions and Associated Costs

The core of the amended order focuses on the conditions for reconnecting unauthorized connections. It outlines administrative charges for tampering or meter bypass, which vary based on customer class and the frequency of the offense. For instance, single non-MD residential customers face an initial charge of NGN 100,000, while subsequent incidents will attract a charge of NGN 150,000. Maximum Demand (MD) meter tampering attracts significantly higher penalties, with the initial incident incurring a charge of 450% of the customer’s last authorized recorded monthly consumption.

In addition to these administrative charges, customers are also liable for reconnection costs, which are fixed amounts depending on whether the customer is a Non-MD (NGN 10,000) or MD (NGN 50,000) customer.

2. Addressing Delayed Reconnections

The order also addressed the issue of delayed reconnections, mandating distribution companies (DisCos) to compensate customers with energy credits equivalent to 100% of their daily consumption for each day of delay beyond 48 hours. This compensation also applies in cases of unjustifiable disconnection.

3. Revenue Recovery and Reporting

Furthermore, the amended order stipulates that customers who engage in unauthorized access must also pay for the Loss of Revenue (LoR) to the DisCo through back-billing at the prevailing tariff for the established period of unauthorized access. DisCos are required to submit monthly reports to the Commission detailing instances of unauthorized access and must ensure that all payments related to these incidents (excluding reconnection fees) are promptly remitted into a designated Collection Account.

4. Standard Operating Procedure (SOP) for DisCos

The order also provides a Standard Operating Procedure (SOP) for DisCos to follow when dealing with unauthorized access. This SOP includes:

• Identifying suspected areas
• Analyzing consumption data and billing records
• Employing surveillance techniques
• Conducting physical meter inspections
• Using advanced metering infrastructure and data analytics
• Maintaining detailed records of investigations
• Issuing disconnection notices and disconnecting premises
• Pursuing penalties and legal actions against offenders, including collaboration with law enforcement agencies.

IMPLICATIONS FOR STAKEHOLDERS

Customers: The order has significant financial implications for customers involved in unauthorized access, with the introduction of administrative charges, reconnection costs, and back-billing for loss of revenue. However, it also protects customers from prolonged disconnection through the delayed reconnection compensation clause.

Distribution Companies (DisCos): The order empowers DisCos to disconnect unauthorized connections and provides a framework for recovering lost revenue and imposing penalties. It also places a responsibility on DisCos to adhere to due process in investigations and ensure prompt reconnection of customers after compliance.

Nigerian Electricity Regulatory Commission (NERC): The order demonstrates NERC’s proactive role in regulating the electricity sector, protecting stakeholders, and ensuring compliance with the Electricity Act 2023. It also highlights NERC’s commitment to reducing losses in the system.

TAKEAWAYS

a. The amended order aims to create a deterrent against unauthorized access, meter tampering, and bypass by imposing substantial financial penalties.

b. It emphasizes the need for DisCos to follow due process and adhere to standard operating procedures in handling cases of unauthorized access.

c. The order sought to balance the need to penalize offenders with the need to protect customers from undue hardship through delayed reconnection compensation.

d. It underscores the importance of accurate record-keeping, reporting, and revenue management for DisCos.

CONCLUSION

NERC’s Amended Order on Unauthorized Access, Meter Tampering, and Bypass is a crucial regulatory intervention designed to curb illegal activities in the electricity sector, protect revenue, and ensure fair practices. By clearly outlining the responsibilities of DisCos and the liabilities of customers, the order aims to foster a more transparent, accountable, and efficient electricity supply industry. Effective implementation and enforcement of this order will be critical to achieving its objectives and promoting a sustainable electricity sector in Nigeria.