Electricity distribution companies have stated their disagreement and displeasure with the Lagos State Government’s proposed plan to phase out electricity customer band classification.

According to The PUNCH, some officials of the firms who spoke anonymously with them warned that the decision could trigger consumer unrest, worsen market distortions, and lead to blackouts if implemented prematurely.

Though they commended the intention of the plan, they argued that the state must first guarantee a stable electricity supply across all areas before abolishing the banding structure introduced by the Nigerian Electricity Regulatory Commission in 2024.

The criticism comes after comments by the Lagos State Commissioner for Energy and Mineral Resources, Biodun Ogunleye, who said at a press briefing in Alausa, Ikeja, on Monday that the state was working towards eliminating electricity band classification and ensuring stable power supply for all residents.

In April 2024, the NERC introduced a framework where electricity consumers were categorised into Bands A to E based on the number of hours of electricity supplied daily. Band A customers, who enjoy a minimum of 20 hours of electricity supply, pay cost-reflective tariffs, while customers in lower bands continue to enjoy government subsidies with fewer hours of supply.

However, the DisCos argued that removing the classification without first improving electricity generation and supply across the state would create serious challenges, especially when many customers are not metered.

“Their intention is very good. It is a laudable intention. But there’s a difference between good intentions and practicability. We have to always think about what is practicable and what is not practicable. A lot of people play to the gallery as far as power is concerned in Nigeria. Talk is cheap,” one of the operators said.

He added, “The Lagos State Government is still the best in Nigeria. No state is as good as Lagos in terms of data, in terms of performance, and in terms of practice. The Lagos State Government is better than any other government. So, as a result of that, one can say that Lagos State can do whatever it promises to do.

“But we have to be realistic. To stop estimated billing, you must meter everybody, and to meter all unmetered customers, you have to pay N180,000 multiplied by the number of electricity customers in Lagos. That’s the money you have to raise to meter them. You can calculate it. There’s a cost element to metering.”

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The operators said the abolition of the band classification would worsen the condition of persons living in underserved communities who currently pay subsidised tariffs.

“Eliminating band classification will cause crises. Lagos may not understand it now. Let me make it practical for you: some people live in areas with a stable power supply, while some are in underserved areas where they may not have a power supply for days or weeks.

“If you now remove band classification and ask all of them to pay a cost-reflective tariff, the people without electricity will protest. They will shout because they don’t have electricity, but you want them to pay the same amount as those enjoying a minimum of 20 hours of electricity.

“Let’s be practical; this is not about politics. The moment the state said it would charge cost-reflective tariffs and no subsidy payment, I knew it was coming up with something,” another operator stated.

One of the sources said, “The removal of the electricity subsidy is good, but when you remove banding and charge cost-reflective tariffs, everybody will be paying over N200 per kilowatt-hour instead of N68 for those in underserved areas. This will generate crises. So you can’t do that until you first generate enough electricity for all customers to have a stable supply.

“The band classification is to wake operators from their slumber to generate and supply more so that more customers can be migrated to Band A, where they pay the real cost of electricity.

“If you collapse the band classification, those already in Band A won’t complain, but those in Band D or E will not be happy. The state government is trying to play politics with the state electricity market.”