N750 fixed charges are legal, says energy commission boss

 The Nigerian Electricity Regulatory Commission
(NERC) says fixed charges collected by Electricity
Distribution Companies are legal as it is contained in
Electricity Power Sector Reform Act of 2005 (EPSR).
Chairman of NERC, Dr Sam Amadi, said this, on
Monday, in Abuja while reacting to the resolution of
the National Assembly (NASS) that NERC should
rescind the charges.
"Fixed charge that consumers pay is not illegal or
necessarily fraudulent. Fixed charges appear in
different names in electricity markets across the
world.
"The difference in Nigeria is that we do not have a
good supply of electricity because of lack of adequate
generation capacity. The purpose of fixed charge is to
recover capital and fixed costs of the various
operators in the industry.
"Section 32 of EPSR Act mandated the commission to
approve a tariff that allowed investors to recover
their cost with reasonable return on assets invested
in the business," he said.
Amadi explained that investors in the sector invested
in assets on regular basis and would recover their
investments through fixed charges paid by
consumers.
NERC said that once a consumer was connected to the
network, the investors are by law expected to
recover the cost of that investment whether energy
was supplied or not.
He added that fixed charge was not tied to Nigerian
customers alone, but rather a universal practice used
in many countries of the world.
Amadi noted that abolishing fixed charge might
impact negatively on generation operators who
invested heavily and continuously to provide more
stable power.
He said that Nigeria’s type of fixed charge was
different because customers were charged whether
they had electricity for many months or not.