By Constance Athekame, News Agency of Nigeria (NAN)
The issue of estimated billing has been a challenge in the power sector, with many electricity consumers across the country complaining about inflated costs, a lack of transparency, and being charged more than their actual power consumption.
For several years, there have been protests over exploitative billing by Electricity Distribution Companies (DisCos).
Many homes that barely get an electricity supply once a week are charged outrageous sums per month in a billing system that is not cost-effective.
In some cases, the difference in charges could be as high as 500 percent within a short time, even when there is little or no improvement in power supply.
The most affected by this exploitation are electricity consumers without pre-paid meters, as their bills are estimated.
Affected consumers have continued to complain that the high billing led to overpayments or disputes, with common complaints focusing on high charges, opaque calculations, and issues with meter installation.
They said that 11 years after privatisation, millions of them still relied on estimated billing because prepaid meters were unavailable.
According to them, estimated billing has led to “crazy billing”, charges far higher than the electricity they consume.
Mr Princewill Okorie, Executive Director, Electricity Consumer Protection Advocacy Centre, described estimated billing as criminal, adding that it is not conducted in accordance with the Nigerian Electricity Regulatory Commission (NERC) methodology.
According to him, NERC directed that transformers used to supply electricity to those on estimated billing should have a meter to measure the energy delivered to a location and convert it to kilowatt-hours.
He said that most distribution companies use transformers without meters to exploit consumers.
“You must not give bills anyhow; you must check the meters on the transformer to know the electricity supplied to consumers.
“It is wrong for people to be paying for what they did not consume,‘’ he said.
A consumer in Lugbe Zone 7, Mrs Mabel Osuji, said the Abuja Electricity Distribution Company (AEDC) had not provided meters in the area, so residents pay whatever bill is issued to them.
According to her, the bill can be high or low.
“We are waiting for the pre-paid meters that the government promised to roll out so that we can only pay for what we consume,‘’ she said.
Another consumer in the same area, Mr Monday Olaniyi, said that having to pay bills based on estimates was not ideal.
Olaniyi said he did not know what he had consumed, but he just kept paying any bill given to him.
“I have applied for the pre-paid meter, and I am patiently waiting for it to end these crazy bills,‘’ he said.
To address estimated billing, the Federal Government, through NERC, issued an order capping estimated bills for unmetered customers based on feeder averages to ensure fairness.
The NERC Order on Capping of Estimated Bills is contained in Order No: NERC/197/2020.
It protects unmetered customers in Nigeria by setting maximum charges for estimated electricity bills that align with the actual consumption of metered users on the same feeder.
“This has led to subsequent enforcement orders and sanctions for Electricity Distribution Companies (DisCos) failing to comply, requiring credit adjustments for over-billed customers.
“This order repealed older regulations and mandates that Distribution Companies (DisCos) provide these caps, with specific monthly energy caps available for different feeders,” NERC said.
According to the commission, Electricity consumers do not want to pay based on estimated bills; rather, they want to pay for what they consume and should be provided with meters to achieve this.
The Federal Government is currently metering electricity consumers to ensure accurate billing, end-to-end estimated billing, reduce revenue leakage, and boost transparency in the power sector.
The Federal Government also seeks to improve efficiency and restore public trust through its Presidential Metering Initiative (PMI), deploying millions of smart meters to bridge the gap, protect vulnerable Nigerians, and make the sector financially viable.
The key objectives of the FG metering initiative to end estimated billing are to eliminate billing consumers based on assumptions rather than actual consumption.
It is also to ensure that consumers pay only for the electricity they use, promoting transparency, protecting revenue, and helping DisCos recover revenue lost to non-payment and inefficiencies.
“Ensure sector viability: enhance the financial health of the power sector to attract investment, ensure public trust and confidence in electricity providers.
The initiative would also support Local Production and foster local meter manufacturing and job creation.
The Minister of Power, Mr Adebayo Adelabu, said that the Federal Government had secured about N700 billion to roll out 2 million meters annually over the next five years under the initiative.
Adelabu disclosed this at the 2025 Nigerian Energy Forum, with the theme “Powering Nigeria through Investment, Innovation, and Partnership”.
He said the fund was obtained by the Federal Government from the Federation Account Allocation Committee.
According to him, the PMI aims to close Nigeria’s metering gap, improve transparency, and enhance the financial stability of the power sector.
He said the initiative complemented the 3.2 million meters being procured through the World Bank’s Distribution Sector Recovery Programme (DISREP), positioning the country to bridge the metering gap within five years.
The minister said that the Federal Government was leveraging bilateral funding and development finance to attract private investment and expand electricity access in underserved communities, schools, hospitals, and public institutions.
“In the past two years, more than two billion dollars have been mobilised through key programmes, including the World Bank’s DARES, NSIA’s RIPLE, and the JICA fund.
“These interventions are accelerating renewable energy deployment and access to reliable power,” he said.
The Federal Government, through NERC, approved the disbursement of N28 billion to DisCos for the procurement and installation of prepaid meters under the Meter Acquisition Fund (MAF) Tranche B scheme.
NERC said that the N28 billion was for the procurement of meters for all outstanding unmetered Band A customers at no cost.
This announcement was contained in the Order on the Operationalisation of “Tranche B” of MAF, issued by NERC and signed by its Vice Chairman, Musiliu Oseni, and the Commissioner, Legal, Licensing and Compliance, Dafe Akpeneye.
According to the order, the funds approved under Tranche B of MAF are intended to meter all outstanding unmetered Band A customers.
They also focus on expediting the closure of the metering gap for customers currently classified under Tariff Band B.
”The N28 billion shall be allocated in proportion to the respective contributions of the DisCos, and the DisCos are expected to meter all outstanding unmetered Band A customers.
”They are also required to expedite the closure of the metering gap for customers currently classified under Tariff Band B.
“Schedule 1 provides the detailed breakdown of the funds available to each DisCo for the purchase of end-use customer meters.
“All the meters to be procured and installed under the MAF framework shall be provided at no cost to the customers,” it said.
The commission said that the order seeks to establish a clear and transparent framework for the implementation of Tranche B of the MAF scheme.
It also said that the order sought to define the eligibility requirements and obligations of DisCos and Meter Asset Providers (MAPs) for accessing and utilising funds.
“It prescribes the terms of financing, repayment, and utilisation of funds under the scheme.
“It also sets out the monitoring, reporting, and evaluation requirements to ensure accountability, efficiency, and transparency in the deployment of MAF-funded meters.
”It provides operational guidelines and conditions applicable to participating entities to safeguard the integrity of the MAF scheme, ”it said.
Giving a breakdown of the releases of funds accrued under MAF, NERC explained that in April 2024, out of the accrued sum of N21.864 billion, it released N21 billion to the DisCos for the procurement of meters under tranche A of the MAF scheme.
It said that the latest is the N28 billion released under Tranche B of the MAF scheme.
Also, recently, NERC said that between 600,000 and 700,000 electricity meters are currently available for distribution nationwide.
Its chairman, Musiliu Oseni, said this at the 4th Nigerian Electricity Supply Industry (NESI) Stakeholders’ Meeting in Abuja.
Oseni, while urging DisCos to speed up the rollout of the meters, said the government had already made the necessary investments to ensure their availability.
According to him, DisCos should take responsibility for ensuring that meters are delivered to customers without delay.
“There are currently 600,000 to 700,000 meters available in the country. The government has made the investment, so the DisCos need to step up.”
Oseni, who also spoke on the ongoing transition to State Electricity Regulatory Commissions, called on the DisCos to fully cooperate with the new regulators, saying no operator is above regulatory oversight.
As the Federal Government and other stakeholders take steps to address the contentious issue of estimated billing by providing prepaid meters, affected consumers urge them to expedite action to correct the situation.
Experts believe that if more pre-paid meters are introduced into the power sector, estimated billing would be a thing of the past.
