Impact of 2013 Tariff Billing Reforms on Economic Efficiency in Bwari Area Council of the Federal Capital Territory (FCT) Abuja

Abstract

This research investigates the economic inefficiencies arising from the Abuja Electricity Distribution Company's (AEDC) estimated billing practices for non-metered electricity consumers in Bwari Area Council, Federal Capital Territory, Nigeria. The study explores the adverse impacts of these practices on household incomes, small business performance, and consumer trust through the lens of the neoclassical economic theory of efficiency, consumer behavior, and the modern theory of electricity demand. The findings highlight that inaccuracies in estimated billing practices disproportionately affect economically vulnerable groups, thereby hindering local economic stability.

Employing a mixed-methods approach that integrates quantitative and qualitative data with content analysis, the research uncovers significant challenges associated with AEDC's estimated billing system. Overbilling and billing unpredictability not only erode consumer financial stability but also impair the operational efficiency of micro-, small-, and medium-sized enterprises (MSMEs). These inefficiencies exacerbate inequality, amplify socio-economic pressures, and fuel widespread consumer dissatisfaction.

To address these challenges, the study proposes several recommendations, including the implementation of universal prepaid metering, enhanced billing transparency, and targeted subsidies for vulnerable consumers. These interventions aim to improve fairness, restore trust, and foster economic inclusivity. By aligning with the United Nations Sustainable Development Goal 7 (affordable and clean energy for all), this research underscores the critical role of equitable energy distribution in fostering sustainable development and economic empowerment.