Worried by observed misconception of its planned activities, the Nigerian Electricity Regulatory Commission (NERC), has made it clear that it had no plan to dump the Multi-Year Tariff Order (MYTO) framework used in determining the tariff payable by electricity consumers in the country.
The commission also stated that in line with the provisions of the Electric Power Sector Reform Act, 2005, it would ensure that prices charged by licensees were fair to consumers and sufficient to allow the licensees to recover the cost of their business activities, while earning a reasonable return on the capital they invested.
Rather, what is now doing is to review the financial model of the tariff order to ensure its integrity and consistency of the platform with approved tariff principles.
In a statement, the Commission stressed that “NERC hereby reaffirms that there are no plans to dump the MYTO framework used in determining end-user tariffs based on revenue requirement of the electricity industry.
“As part of the periodic evaluation of software models utilised by the commission, NERC plans to review the MYTO financial model to ensure its integrity and consistency of the platform with approved tariff principles pursuant to the numerous updates undertaken since the inception of the methodology in 2008.”
The Commission also believes that a holistic review of the MYTO model will include aligning the basic assumptions and parameters with the underlying principles of the tariff methodology and ascertaining the full workability of the macros and other formulae.
The statement added further that “This is an important initiative of the commission as we prepare to commence the review of performance improvement plans to be submitted by utilities for the tariff period 2019-2023”.
