PREPAID ELECTRICITY METERING IN NIGERIA: THE UNLAWFUL TRANSFER OF HISTORICAL DEBTS TO NEW TENANTS AND ARBITRARY ALLOCATION OF ACCUMULATED DEBTS IN MULTI-TENANT COMPOUNDS

PREPAID ELECTRICITY METERING IN NIGERIA: THE UNLAWFUL TRANSFER OF HISTORICAL DEBTS TO NEW TENANTS AND ARBITRARY ALLOCATION OF ACCUMULATED DEBTS IN MULTI-TENANT COMPOUNDS

A Legal Examination of the Electricity Act, 2023, and Consumer Protection Under Nigerian Law

By Prince Uwa Umo

1. Since the introduction and increasing deployment of prepaid electricity meters in Nigeria, serious complaints have arisen among electricity consumers concerning the arbitrary transfer of old and accumulated electricity debts to newly installed meters. Particularly disturbing are cases involving new tenants who are suddenly saddled with historical debts incurred before their occupation, and residents of multi-tenant compounds whose individual meters are burdened with electricity liabilities accumulated by several households. In some instances, electricity distribution companies (DisCos) install separate prepaid meters for several occupants on the same date, only to load the entire outstanding indebtedness of the premises onto the meter of one resident. One is left wondering whether the meter was installed to measure electricity consumption or to inherit the financial sins of an entire compound.

2. The starting point is Section 115(4) of the Electricity Act, 2023, which expressly prohibits electricity distribution licensees, distribution franchisees and supply licensees from enforcing a former landlord’s or previous tenant’s outstanding electricity bill against a new landlord, new tenant or new occupant of the property. Although the law recognises the right of electricity distribution companies to recover legitimate arrears, that right cannot be exercised against innocent incoming occupants merely because they now reside in premises associated with outstanding electricity bills. Electricity debt is not a family heirloom to be handed down from one tenant to another, nor is it an encumbrance that automatically follows the keys to a rented apartment.

3. This statutory protection is reinforced by Regulation 29(3) of the NERC Customer Protection Regulations, 2023, which provides, in the context of vacating customers, that the customer who consumed the electricity remains liable for the resulting debt and that responsibility for recovery rests with the distribution company. The Regulation prohibits transferring that debt to a new customer occupying the premises. Regulation 29(5) further addresses the liability of a new occupant for electricity bills arising from the date of connection. Consequently, the installation or activation of a new prepaid meter cannot magically transform yesterday’s electricity debt into today’s liability of an innocent tenant. A new meter is not a legal instrument for the transfer of another person’s indebtedness.

4. An even more disturbing dimension arises where several households occupy a common compound comprising single-room apartments, two-bedroom flats and three-bedroom flats. Such premises may previously have operated under one electricity account, with accumulated arrears arising from shared billing arrangements. Upon the introduction of individual prepaid meters, the distribution company may proceed to load the entire historical indebtedness onto the meter of one occupant, notwithstanding that several households occupied the premises during the period when the debt accumulated. The obvious question is whether the selected consumer is legally responsible for the debt or any part thereof. Surely, the installation of separate meters should separate electricity consumption, not concentrate the collective debts of an entire compound upon one unfortunate occupant.

5. Consider a situation where five or more residential units within a compound are issued separate prepaid electricity meters on the same date, yet the entire historical electricity indebtedness is loaded exclusively onto the meter serving one residential unit. Such an allocation, without proof that the selected consumer is legally responsible for the debt or any part thereof, is manifestly arbitrary, unreasonable, oppressive, devoid of legal foundation and consequently open to legal challenge. An electricity distribution company cannot lawfully single out one consumer and impose upon that consumer the accumulated electricity liabilities of several households without establishing a lawful basis for doing so. Debt recovery is not a game of musical chairs in which the last person left standing, or the first meter activated, becomes responsible for everybody’s bill.

6. It must be emphasised that the existence of a common electricity account does not automatically render every resident of the compound personally liable for the outstanding balance. Neither does it authorise the distribution company to impose the entire indebtedness upon one occupant or arbitrarily distribute it among all the residents. The company must identify the original registered customer, the period during which the debt accumulated, the applicable billing arrangements and the factual or contractual basis for attributing liability to any particular consumer. Where only part of the debt is legally attributable to a consumer, that cannot justify transferring the entire balance to the consumer’s account. Electricity indebtedness must be established by evidence and law, not by guesswork, administrative convenience or the biblical principle of visiting the sins of the fathers upon the children.

7. The injustice becomes particularly glaring where a new tenant occupying only one room, with modest electricity requirements consisting of a few energy-saving bulbs, a ceiling fan, a rechargeable radio and mobile-phone charging, is burdened with substantial historical indebtedness accumulated in premises containing larger residential units. Although the number of electrical appliances does not conclusively determine liability, such circumstances reinforce the need for proper investigation and account reconciliation. More objectionable still is the practice of automatically deducting portions of prepaid electricity purchases towards settlement of debts not legally attributable to the affected consumer. A distribution company cannot accomplish through the back door of prepaid deductions what the law forbids it from doing through the front door of direct billing.

8. An affected consumer is entitled to challenge the disputed indebtedness formally and demand its removal, cessation of further deductions, reconciliation of the account, disclosure of historical billing records and refund or restoration of all amounts wrongfully recovered. Furthermore, Regulation 25(1)(c) of the NERC Customer Protection Regulations, 2023, protects consumers against disconnection for non-payment where a qualifying complaint concerning the unpaid bill has been lodged in accordance with the prescribed procedure and remains unresolved. Regulation 26 makes provision for electricity-credit compensation in cases of wrongful disconnection. Where the distribution company fails to resolve the complaint, the consumer may pursue regulatory remedies and, where appropriate, seek judicial relief. The consumer is not a helpless spectator in a drama scripted by the DisCo, directed by its billing department and financed from the consumer’s pocket.

9. We therefore call upon the Nigerian Electricity Regulatory Commission (NERC) and the Akwa Ibom State Electricity Regulatory Commission (AKSERC) to shine a brighter searchlight on the activities of electricity distribution companies, particularly their billing practices, arbitrary allocation of historical electricity debts and wrongful deductions from consumers’ prepaid electricity purchases. The apparent penchant of some DisCos for questionable, exploitative and mischievous billing practices demands more rigorous regulatory scrutiny, transparent investigation and appropriate sanctions wherever violations are established. The regulatory authorities must ensure that prepaid metering does not become an instrument of oppression, unjust enrichment or the indiscriminate transfer of electricity liabilities to innocent consumers. After all, regulatory commissions were established to regulate electricity operators, not merely to watch helplessly while consumers are left to bear the shock.

10. Electricity distribution companies are undoubtedly entitled to recover legitimate electricity debts, but that right must be exercised lawfully and against persons properly responsible for the indebtedness. The Electricity Act, 2023, and the NERC Customer Protection Regulations, 2023, provide important safeguards against the unlawful transfer of historical electricity liabilities to innocent consumers. Where several households occupy a common compound, accumulated electricity indebtedness cannot simply be imposed upon one newly metered occupant without establishing that occupant’s legal responsibility for the amount claimed. Prepaid metering was designed to make consumers pay for electricity before consuming it, not to make them pay for electricity consumed by strangers before they moved in.

11. Ultimately, the governing principle is clear: NO ELECTRICITY CONSUMER SHOULD BE COMPELLED TO PAY ANOTHER PERSON’S ELECTRICITY DEBT MERELY BECAUSE THAT CONSUMER OCCUPIES THE SAME PREMISES OR HAS BEEN ISSUED A NEW PREPAID METER. ELECTRICITY DEBT RECOVERY MUST BE FOUNDED ON ESTABLISHED LEGAL LIABILITY, NOT ARBITRARY ALLOCATION, ADMINISTRATIVE CONVENIENCE OR EXPLOITATION. The law permits DisCos to recover legitimate debts; it does not authorise them to manufacture debtors. A prepaid meter measures electricity consumption. It is not a device for distributing inherited financial punishment.

PRINCE E. UWA UMOH, OOW
(The Faithful of God)
Lead Counsel
Brightstar Law Consult
04112026