KNOW HOW TO CALCULATE COST OF ELECTRICITY CONSUMED ON A POST PAID BILL FROM POWER HOLDING NIGERIA PLC (PHCN)

RESIDENTIAL (R2) A CASE STUDY INTRODUCTION The rate at which electrical energy is supplied to a consumer is known as Tariff [1]. A tariff must have the following desirable characteristics: (a) Proper return: It should ensure the proper return from each consumer (b) Fairness: It must be fair so that different types of consumers are satisfied with the rate of charge of electrical energy. (c) Simplicity: The tariff should be simple so that an ordinary consumer can easily understand it. (d) Reasonable Profit: The profit element in the tariff should be reasonable. (e) Attractive: The tariff should be attractive so that a large number of consumers are encouraged to use electrical energy [2]. Looking at the above characteristics critically, it has been discovered that, not every consumer of electrical energy in Nigeria understands the tariff charged by PHCN because, the Post paid bill issued are full of bogus and ambiguous amounts. Sometimes, Electrical energy meters are installed in the premises of the consumers, but readings are not taking on those meters. These types of meters are known by the PHCN marketers as Coded Meters. Owners of those meters need to write and lodge complaints before such is rectified. The aim of this write-up is to know to calculate the energy consumed by a consumer on a residential tariff (R2). In 2012, Nigeria Electricity Regulatory Commission (NERC) published the Multi-Year Tariff Order (MYTO) a tariff plan that sets both wholesale and retail tariffs for the industry over a five year period. This means that tariffs have already been set for every year starting 2012 through to 2016. Effective June 1 of every year, a new tariff is to take effect. This will continue till the five-year period of the MYTO has lapsed, after which there will be a major review [3]. The cost of electricity for a consumer in Nigeria is determined by the following: (i) The tariff class (ii) The consumers locations (iii) The tariff rates [4].

Tariff Code Residential R1 Residential R2 Residential R3 Residential R4 Commercial C1 Commercial C2 Commercial C3 Industrial 1 Industrial D2 Industrial D3 Special 1 Special 2 Special 3 Street Lighting S1 Source: NERC

2012 2013 2014 ENERGY CHARGE N/kWh 4.00 4.00 4.00 12.87 12.87 12.87 23.71 23.71 23.71 23.71 23.71 23.71 15.84 15.84 15.84 22.04 22.04 22.04 22.04 22.04 22.04 17.78 17.78 17.78 23.10 22.10 23.10 23.10 23.10 23.10 17.02 16.02 17.02 17.02 17.02 17.02 17.02 17.02 17.02 13.07 13.07 13.07

2015 4.00 12.87 23.71 23.71 15.84 22.04 22.04 17.55 23.10 23.10 17.02 17.02 17.02 13.07

TABLE 1: EKO Distribution Company (DISCO) Energy Charge

TABLE 2: EKO Distribution Company (DISCO) Fixed Charge Tariff Code Residential R1 Residential R2 Residential R3 Residential R4 Commercial C1 Commercial C2 Commercial C3 Industrial 1 Industrial D2 Industrial D3 Special 1 Special 2 Special 3 Street Lighting S1 Source: NERC 2012 2013 2014 Fixed Charge N/Month 500 750 1,125 21,265 31,898 47,847 118,831 136,655 150,321 500 19,278 107,728 603 105,994 107,728 500 47,500 53,125 500 750 22,170 118,501 905 116,594 118,501 750 52,250 58,438 750 1,125 25,495 130,351 1,357 129,300 130,351 975 57,475 64,281 1,125 2015 1,688 52,632 165,353 1,688 29,819 143,387 1,628 142,330 143,387 1,463 63,223 70,709 1,688

Tariff Code Residential R1 Residential R2 Residential R3 Residential R4 Commercial C1 Commercial C2 Commercial C3 Industrial 1 Industrial D2 Industrial D3 Special 1 Special 2 Special 3 Street Lighting S1 Source: NERC

2012 2013 2014 ENERGY CHARGE =N=/kWh 4.00 4.00 4.00 12.45 12.83 13.21 21.84 22.50 23.71 21.84 22.50 23.71 16.56 17.06 17.57 20.30 20.91 21.54 20.30 20.91 21.54 16.38 16.87 17.38 21.28 21.92 22.58 21.28 21.92 22.58 15.68 16.15 16.63 15.68 16.15 16.63 15.68 16.15 16.63 12.04 12.40 12.77

2015 4.00 13.61 23.87 23.87 18.10 22.18 22.18 17.90 23.25 23.25 17.13 17.13 17.13 13.16

TABLE 3: IKEJA Distribution Company (DISCO) Energy Charge

TABLE 4 : IKEJA Distribution Company (DISCO) Fixed Charge Tariff Code Residential R1 Residential R2 Residential R3 Residential R4 Commercial C1 Commercial C2 Commercial C3 Industrial 1 Industrial D2 Industrial D3 Special 1 Special 2 Special 3 Street Lighting S1 Source: NERC 2012 2013 2014 Fixed Charge= N=/Month 500 750 895 17,513 26,269 31,332 109,449 500 15,876 99,224 500 97,626 99,224 500 35,938 43,750 500 164,174 750 23,814 148,835 1,000 195,252 198,447 750 43,125 65,625 650 2015 1,067 37,37

195,818 233,561 895 28,404 177,523 1,193 232,887 236,697 895 51,437 78,274 775 1,067 33,879 211,740 1,423 277,775 282,320 1,067 61,352 93,361 925

TABLE 3: Sample of Consumer Post Paid Bill

Description ENERGY kwh

Tariff Code R2

Read Date

Present Previous Multiplier Consumption Current Reading Reading Charges 31/05/2013 6759 6674 1.00 85 1,058.25

FIXED

FC R2

500.00

As at 31/05/2013 kWh R2 Rate =N= 12.45 From the Bill (see Fig 1.1) we have Present Reading which indicates the last reading taken by the PHCN representative. Previous Reading indicates the reading at the beginning of the month in question. It should be noted that, since this is post paid bill it will be available after the end of the month. CALCULATIONS Consumption = Present Reading Previous Reading (KWh R2) = 6759 6674 = 85 The Multiplier = 1.00 x 85 = 85 kWh Current Charges (R2) = kWh x rate /kWh = 85 x 12.45 = N 1,058.25 On Energy Used The Fixed Charge = =N= 500.00 Sub-total will be =N= 1,558.25 5% VAT of the Sub-total will be =N= 77.91 Previous Balance indicates the amount owned by the energy consumers in the previous bill. Payments: is the amount paid by the consumer. Adjustment: this is done if there is deficit or surplus in the payment made by Electrical energy consumer. Net arrears: this will also indicate whether the Consumer owes the Company or the Company is owes the Consumer. Total Due = Sub-total + 5% VAT _+ Net arrears {-ve for Surplus to the consumer +ve for deficit to the consumer}. For Sample Used See (Fig 1.1):

Total Due= 1,558.25 + 77.91 224.65 = N1, 411.51. This is the amount due to be paid by the Energy Consumer. This is amount will be taken to the next bill as the previous balance.

Fig 1.1: Sample of the Bill References: [1] [2] [3] MEHTA VK and MEHTA R Objective Electrical Technology S CHAND New Delhi 2007. MEHTA VK and MEHTA R Objective Electrical Technology S CHAND New Delhi 2007 Nigerian Electricity Regulation Commission (NERC) www.nercng.org/index.php

[4] Nigerian Electricity Regulation Commission (NERC) www.nercng.org/index.php/documentlibrary