Band A Electricity tariffs are having unexpected consequences. Kayode lives in Obawole Iju, a low-income area of Lagos bordering Ogun State. He earns about ₦200,000 every month working as a freelance writer. In early April 2024, he heard that the Nigerian Electricity Regulatory Commission (NERC) was increasing electricity tariffs for residents of highbrow areas, classified as Band A customers. However, he didn’t think this concerned him.
“It was something for rich people living three hours away in places like Lekki and Ikoyi to worry about,” Kayode thought. But soon, he got a rude shock. He purchased N10,000 worth of units for his meter, but it lasted only three days instead of the usual three or four weeks. He quickly realised that his community had been moved to the Band A tariff.
Kayode, a content developer, told Arbiterz, “Although we used to have a regular supply of electricity up to 15 hours before, suddenly they increased it to 24 hours, and they hardly interrupt the supply. About a month after increasing the supply duration to 24 hours, they placed the whole area on Band A, and we began to buy energy at the rate of N205 instead of the previous N66 per unit.”
He added, “Consequently, we buy like 48 units with N10,000. And it depends on usage. In my house, if I buy that N10,000, within three to four days, it will finish, despite not using an air conditioner, just a washing machine, deep freezer, or fan. Before, that N10,000 could last me up to one month before it got exhausted. That’s for me.”
He said he now spends roughly N50,000 on electricity a month for personal consumption. Many of his neighbours in Obawole, who are on lower or irregular incomes, are worse off.
“Now, even though I’m managing my consumption, I’m still spending close to N50,000 a month. Thank God I have a separate meter; what I buy is what I use. Unlike apartments joined together, where there are more problems, they have to pair with others,” he said, noting that consumption may not be regulated in such an arrangement.
According to sources at Ikeja Electric, the basis for band categorisation is the feeder, not necessarily the customers’ ability to afford the tariff on their feeders. This explains why some customers, especially low-earners and SMEs, told Arbiterz they “accidentally” found themselves on Band A. One such customer is Kayode.
Kayode’s neighbours and residents with similar socioeconomic profiles across Lagos State, for example, accidentally found themselves on different sides of NERC’s band or tariff divides without being pre-informed.
In the Jakande Isolo area, a community youth leader, Elvis John, said, “Those living in Jakande Estate, get very high tariff, while those living in Bucknor Estate get lower tariff. I know this because I have lived in both places.”
Also Read: Band A meets Plan B: Nigerian offices, homes devise strategies to manage higher electricity costs
When asked when electricity tariff became high in the estate, he said, “I don’t know (if it became very high recently) but when I bought my meter, I was made to understand that low-cost housing pays highly because of the steady light there.”
“Ninety-five per cent of people living in the low-cost housing use prepaid meters, but in Bucknor, people use postpaid. We share bills. For my house now, a three-bedroom flat, it’s N4,500,” John added.
Bayo, who operates a barber shop in the Odokekere area of Lagos State, told Arbiterz that he was surprised to find his place of business categorised under Band A.
“We were not informed,” Bayo, who lamented the exorbitant amount he pays for electricity, said. “This so-called Band A will run some of us out of business if care is not taken,” the haircut specialist added. He further said some of his colleagues in the same area are facing the same challenges.
Speaking on how he is coping as the owner of a small business, Bayo said even though the cost of fuel is also high, he resorts to using his power-generating set more often than he uses electricity.
“When I compared what it costs me to use electricity from the DisCo and what I spend on my I-better-pass-my-neighbour generator, I realised that it is more cost-effective to use fuel. That’s one of the ways I’ve been coping.
“Using my generator spares me the headache of having to buy over N10,000 worth of tokens on my meter and exhaust it in less than 48 hours.
“I’m planning on getting rechargeable clippers. I will be able to charge the clippers while using the generator or electricity, and once charged, I will switch off the generator or electricity until the clippers are out of battery,” Bayo said.
He added that he no longer stays late at his shop to prevent having to use power when the shop is dark. “I now close early, which is not good for my business. But I have no choice,” he lamented.
Asked if he would have chosen to be on Band A if consulted, Bayo said, “No. The cost is killing small businesses.”
The Vice Chairman of NERC, Musliu Oseni, announced that approved tariffs for Band A customers would see the cost of one kilowatt per hour (KW/h) rising from N66 to N225 per kilowatt-hour (KW/h).
Customers on Band A are those who enjoy 20–24 hours of electricity supply daily, while those on Band B are subscribers who enjoy 16–20 hours. Those on Band C enjoy 12 to 16 hours daily. Also, Band D subscribers are beneficiaries of eight to 12 hours of electricity supply daily, and Band E subscribers only enjoy four to eight hours of electricity supply every day.
On Wednesday, July 3, 2024, some distribution companies, including Ibadan Electricity Distribution Company and Ikeja Electric, among others, announced another upward review of their tariff for Band A from N206.80 per kilowatt-hour to N209.50/kWh, effective from July 1.
According to a public notice on Ikeja Electric’s handle on X, the hike was in line with the service-based tariff regime. It added that “the tariffs for Bands B, C, D and E remain unchanged.”
NERC’s classification of electricity consumers aims to increase the supply of electricity to Nigerians who have the most capacity to pay and charge them a higher tariff. But many Nigerians like Kayode, people in low-income areas with very modest incomes, have found themselves unintended and unwilling beneficiaries of NERC’s policy.
Kayode said he was aware the community had written to Ikeja Electric to revert them to their previous band, which was different from Band A.
“But I know an area on Lagos Island that was recently placed on Band A, but they rejected it. However, following the rejection, their electricity supply, which used to be up to 18 hours a day, is now worse; they hardly get four hours of light in a day. Maybe it’s punishment, I don’t know,” he jokingly said, wondering if it was safe to even ask for a revert to the old band.
Business operators and residents from various parts of Lagos, who spoke with Arbiterz in separate interviews, including Bayo, said they had been having difficult times paying for the cost of electricity as Band A users.
Ayoyinka Oni, who runs an office facility in Maryland, one of the areas placed on Band A feeders operated by Ikeja Electric, said his company was now budgeting up to N4 million annually for electricity.
Although Maryland is a highbrow area, small businesses in the area are also struggling to stay in business owing to the tariff hike.
Oni, who preferred not to give the name of his fintech firm, said, “My office facility is under Band A in Maryland. We pay N200,000 for 896KW, at approximately N223/KW. Before, it used to be 2,600KW for that same amount, variably. But now it’s 896KW; sometimes it can also be 897KW or even lower. It’s so terrible. If we manage it, the units can last up to 10 days, or at most 18 days when we really manage, but it doesn’t last a month. Before, we were using it for one month.”
He said the company had to consider a remote-work model to beat the electricity cost, adding that sometimes, they had to even go off the electricity to save cost.
“It’s terrible. The company has to work on hybrid, that is, go remote or work from home, to reduce consumption. Sometimes, we even have to put off appliances even when there is light,” he told our reporter.
Speaking on how they got to be on the Band A feeder, he said, “We didn’t ask for Band A, but all of a sudden, we just heard we were on Band A. Yes, we used to have light, no doubt, for up to 23 hours. Even if they take it, they would restore it in the next 10 or 20 minutes, except there is a fault.”
“Normally, when we started, we budgeted like N200,000 per month, so in a year, that’s like N2.4 million, but now we cannot budget that anymore because we now budget like N400,000 in a month to meet up. How much is the company making? Sometimes, it’s not even work from home. Sometimes, it’s work and don’t put on the light,” Oni said.
“But largely, we considered hybrid because of the energy management,” he added.
Our reporter also observed that business operators in the Ogba area were now charging exorbitantly for services due to the high cost of electricity they were also paying for.
Arbiterz‘s investigations revealed that the price of some services offered by the business operators had doubled or tripled, as they blamed the cost of electricity and the cost of fuelling generators.
Drycleaners who also depend on electricity for their work now charge up to N1,500 for complete wear, compared to what used to be around N500 to N600.
“I printed some documents for N1,600, which used to be around N800. Printing is now N200 per page. I cut my hair for N1500 instead of N700 previous price. To grind pepper starts from N500 no matter how small the quantity is. Those are the major implications,” Kayode also added.
From Arbiterz investigations, there is no doubt that Band A customers enjoy a steady power supply, even up to 23 or 24 hours, according to respondents who spoke with our reporter.
A resident in the Ifako area, Bayo Quadri, said he had been paying N15,000 monthly since the introduction of his area to the Band A feeder, but noted the light was stable.
“We are having constant power supply, up to 22 hours. My landlord applied for a prepaid meter, we use prepaid (meter). I pay a minimum of N15,000 in a month.
“I think (unknowingly) we’ve been on the Band A feeder before now, even before they announced it. We have been having supply. Not the whole area has the supply anyway,” he told Arbiterz.
When asked if the tariff suddenly increased since the Band A classification, he said, “Yes, it has increased. Before, I used to pay around N80 per unit but now we buy around N200. I spent a minimum of N5,000 before but now it’s about N15,000.
“The cost is now way high. Honestly, if I have to use light for all my appliances, I will be spending more (than N15,000) but I have cut (down on the usage of) my stuff (appliances) and reduced my usage. I feel like electricity should not cost that much. I have to be watchful of what I use.”
Jane Agnes, who runs a Lotto (game) shop for her boss in the Ojodu area of Lagos, said her boss paid up to N30,000 in a month on average.
“We spend like N30,000 plus in a month,” she said in an interview with Arbiterz. When asked if it had always been around that amount before now, she sharply responded, “It was lesser,” saying it was around N15,000 to N20,000. “Can’t say exactly because we don’t buy it once,” she added.
“Now that it has been increased, my boss budgets for thrice the initial cost,” she said, noting their monthly expenses on electricity would now be running to around N90,000.
Agnes spoke about the fact that the supply was steady. “I don’t know if the light is steady at night since we don’t operate at night, but if I come in the morning, I would meet light, and even if they take the light, they would bring it back in like 10 to 20 minutes. Even if it rains, they will bring the light. The light is steady, but my boss is always complaining about the tariff, mainly.”
In the Berger area, Peter, who said he lives in a self-contained apartment, noted he was paying around N10,000 for electricity.
“(We have supply for) almost 24 hours. Roughly, for me, I pay like N10,000. Before the increase, I was paying around N5000 to N7000,” he said.
“Well, the pay is worth it. Once I pay, I don’t worry about buying fuel,” he added. With the new hike in tariff, Peter said he may have to pay more.
While it is believed that a large percentage of customers Band A are metered and, therefore, can measure and control their energy consumption, there are a large number of customers who are unmetered on the same band.
Ogbonna, a resident of Odogunyan, said, “My house is not metered and I fall under Band A customers. There is no way we can control what we use, so we pay a lot of money as an estimated bill.”
He told Arbiterz that he gets over N200,000 as electricity bill monthly, adding that “getting a meter is now a herculean task.”
On June 12, 2024, which was Democracy Day in Nigeria, protesters who stormed the Ikeja under-bridge in area Lagos condemned the hike in electricity tariff amid the rising cost of living.
Among other demands linked to the worsening economic conditions, they demanded that the FG should “nationalise the power sector under democratic workers’ control and management.”
Oni, a member of the Take It Back Movement, who was also one of the coordinators of the protest, said, “The complete privatisation of the power sector is putting Nigerians at the mercy of the DisCos.
“Whether Band A or Band B or C or D, what is important for us as citizens is to have adequate power supply and affordable one. We cannot be paying so much to have light in our country when we are already taxpayers. Electricity is a public commodity, and it should be democratically managed. We demand a reversal of the hike in tariff.”
When contacted on July 5, 2024, for reactions to consumers’ plights and band classifications, the spokesperson for Ikeja Electric, Olufadeke Omo-Omorodion, directed our reporter to the tariff review done by NERC.
“Kindly read up on the tariff review on the NERC website to understand this,” she said in a WhatsApp chat without providing further details.
Across the country, electricity consumers continue to lament the rate of tariff, especially as purchasing power continues to dwindle in Nigeria, given inflation and naira devaluation.
Also Read: NERC goes tough on DisCos for improved electricity, announces sanctions for overbilling
On July 1, 2024, officials of Ahmadu Bello University, Zaria, Kaduna, said the university could not afford a N3.6 billion annual electricity bill.
The bill averaged N300 million monthly, given the former cost of N206 per kWh under the Band A tariff.
The officials in a letter to President Bola Tinubu titled, ‘An open letter to the visitor, President Bola Ahmed Tinubu, over the looming energy crisis in Ahmadu Bello University, Zaria,’ and signed by 40 professors from different departments, called on the president to intervene in the tariff hike issue, adding that universities should be shielded from the extremities of commercialisation.
“We take this action out of the conviction that, as the President of the Federal Republic of Nigeria and Visitor to the university, Your Excellency is in a position to mediate over the matter, especially because the crisis aggravated with the recent high increase in electricity tariff in the country, which ABU in particular, and Nigerian public universities in general, cannot afford due to their weak financial position resulting from chronic underfunding,” part of the letter read.
On July 4, the management of the University of Benin also halted academic activities indefinitely and ordered the students to vacate their hotels immediately.
The move was following students’ protest over the rationing of electricity, among other grievances. The students had blocked the Benin-Ore highway, which caused gridlock and untold hardship to commuters.
“Following the refusal of students of the University of Benin to shift grounds on their demands for 24-hour supply of electricity and more, considered unrealistic by the university’s Senate, the university has shut down academic activities indefinitely.
“Students are to vacate the hostels immediately while all the relevant units of the university are to take note and comply,” a statement by the institution’s Public Relations officer, Benedicta Ehanire, said.
The BEDC PLC had recently disconnected the campus’ light following an unsettled bill of over N250 million slammed on the institution by the electricity company. The development caused a blackout in the school and attendant difficulties for the students.
The institution was said to be paying around N80 million, but the new bill compounded issues for the varsity.
Amid the rising cost of light, the national electricity grid collapsed again on Saturday, July 6, 2024, plunging the country into darkness. The grid collapsed around 3pm.
In a statement, the management of Ikeja Electric, which confirmed the development, said, “The current service disruption is due to a system collapse of the national grid at about 3:08pm today, 6th July.
“We are in collaboration with relevant stakeholders within the power value chain to ensure speedy restoration of supply.”
As in Osun, Enugu, Abuja, etc, the national grid collapse threw residents into blackout in Lagos as well.
The July 6 incident makes it at least four times that the national grid has collapsed this year.
The saying “to whom much is given, much is expected” makes sense, but what about the many Nigerians whose electricity consumption can’t be classified as high, such as those on Band D and E? For the vast majority of Nigerians, the advent of NERC’s band categorisation and new tariff regime has not only led to the so-called unintended consequences for the small minority in areas with almost round-the-clock power supply.
Ahmed Olatunde, a businessman who lives in the Idimu Ejigbo area of Lagos, said his area enjoyed only 10 hours of electricity. “We live in darkness for the better part of the day,” he lamented.
Mrs Peace Orji, a pensioner living in the Odokekere area, said she could only afford to buy electricity worth N1,500 in a week.
“We don’t usually have light all the time. Sometimes, if I buy N1,500, it will last for one week, though sometimes it depends on how they give us light. But because of the heat, we need to use electricity to run the air conditioners.”
According to NERC’s “Multi-Year Tariff Order 2022”, there were 10.51 million metered customers in Nigeria as of 2021. However, just 1.25 million and 1.36 million customers were on Bands A and B, respectively, while most Nigerians (7.92 million) were on Bands C, D, and E. Hence, Band A customers are in the minority, and they include the wealthy residents of highbrow areas as well as a tiny minority of Nigerians like Kayode who, though on very modest incomes, have found themselves in Band A accidentally.
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