Business Hilights
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‘FG should tie April new electricity tariff regime to total metering of customers’

…As NECA says proposed hike necessary

For the fact the ‘December 2019 Minor Review of Multi-Year Tariff Order 2015 and Minimum Remittance Order for the Year 2020,’ recently released by the Nigerian Electricity Regulatory Commission (NERC) indicates that new tariff regime takes off in April this year, yet to be metered Nigerians have asked the Federal Government to tie the hike to total metering of every customer to avoid hyper extortion vide estimated billing.

This is as the Nigeria Employers’ Consultative Association (NECA) argued that the proposed hike in electricity tariff is necessary to get the power sector back on track.

Director-General of the group, Mr Timothy Olawale, said on Monday in Lagos that putting the tariff concerns in context, the issue of the increment was intended to enable the operators rave up investments infrastructure which had been the bane of poor power supplies.

However, NECA boss failed to realise that prior to power unbundling and concessioning, operators had assured on their capabilities to invest to grow infrastructure.

A cross-section of Nigerian electricity consumers who barred their minds on the MYTO provisions said the only way out for tariff hike would be if all consumers are metered by Discos across the federation.

Already, power distribution companies on Monday declared that the new electricity tariffs shall become enforceable from April 1.

The umbrella body of Discos, Association of Nigerian Electricity Distributors (ANED) in a statement, explained that whereas the tariffs shall remain as they had been since 2015, the new tariffs ordered by the NERC would take effect from April and it would cater for revenue shortfalls in the sector.

ANED said, “The Tariffs shall remain the same as they presently are (i.e. 2015 levels) until April 1, 2020 when there will be a slight increment to cater for tariff shortfalls which shall be gradually passed on to the consumer until this is fully completed by the end of 2021.

“In view of the foregoing, we state emphatically that there shall be no change or increase in the existing electricity tariff until April 1, 2020 when the new adjusted tariffs shall begin to gradually reflect the dynamism of our macro-economy.”

The Discos explained that the NERC was empowered by the Electric Power Sector Reform Act to carry out minor reviews of the Multi-Year Tariff Order 2015 twice a year.

“NERC has just reviewed the MYTO 2015 and has published an order on tariffs and minimum remittance for January to June 2020. The tariffs anticipate changes in the currency exchange rates between the United States and Nigeria, changes in the rate of inflation and gas prices,” ANED stated.

It expressed hope that its explanation “substantially clarifies the accurate position and allays any fears and concerns, our esteemed customers may have.”

Business Hilights efforts to get reactions from the General Manager, Public Affairs Department of NERC, Dr. Usman Abba Arabi, on the latest stand of the Discos failed at press time.

Recall that Dr Arabi had in a statement issued Sunday evening and posted on NERC’s website, denied amongst other things that “The Commission wishes to notify the general public that no tariff increase has been approved by the Commission vide the Order.

“However, the Commission in the discharge of its statutory responsibilities enshrined under the EPSR Act, shall continue to undertake periodic reviews of electricity tariffs in accordance with the prevailing tariff methodology. In all instances of such reviews and rulemaking, the Commission shall widely consult stakeholders and final decision shall take due regard of all contributions,” NERC added.

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