Electricity Tariff Will Increase Despite Poor Supply ~ NERC



Despite the erratic power supply in the country and frequent system collapses, electricity tariff will continue to rise, the Nigerian Electricity Regulatory Commission has said.

NERC, while defending the Federal Government’s position on the recent increase in fixed electricity charges, said the Multi Year Tariff Order had an approved tariff stipulated for 2012 to 2016.

The MYTO, which was prepared by NERC and obtained by our correspondents, showed that there would be increases in electricity tariff every year till 2016.

The tariff schedule showed that consumers would have to pay higher on two fronts. Every year, the fixed cost will go up. Similarly, the energy cost or cost per kilowatt hour of electricity will also go up.

NERC had consistently said that increase in electricity tariff would be for the short run and that the amount payable by consumers would begin to fall when the country had produced enough electricity.

The annual tariff increase, our correspondents gathered, would be automatic not minding whether there was appreciable improvement in power supply or not.

The Chairman, NERC, Dr. Sam Amadi, while briefing journalists on Monday following public outcry against the recent increase in the fixed charge from N500 to N700 or N800, depending on the location, said, “The truth is that the tariff must increase despite shortfalls in service delivery.”

He argued that the inability of power distribution companies to live up to expectation was not a tenable reason to slash tariff, adding that it was in the interest of Nigerians not to reduce the charges.

Amadi said most of the shortcomings in the sector were structural and insisted that the commission would not reverse itself on the approved tariff regardless of the underperformances of power distribution companies.

He said, “We regret that the distribution companies have not been very committed to meeting their obligations in the MYTO. NERC recognises that the quality of service has not seen significant improvement, especially in the area of metering and accurate billing of customers.

“Our expectation for significant and sustained improvement in electricity supply and quality service lies in the expected takeover by the privatisation preferred bidders, who have better incentives and commitment, and have made enforceable promises to invest continuously in providing better services to consumers.

“These investments and commensurate improvements will not all be made in one day but over the coming months, years and decades following the entry of new investors and managers of our distribution companies.”

The Nigeria Labour Congress on Sunday condemned the new tariff designed by NERC, with its President, Mr. Abdulwaheed Omar, saying the body rejected the latest figures because of the epileptic electricity supply and the low purchasing power of the working people.

But reacting to the NLC position, Amadi argued that two minor reviews conducted by the commission did not result in increase in tariff.

This, he said, was because the fundamentals of the MYTO and the financial model published on NERC’s website had not significantly changed.

“We must state that the commencement and results of both minor reviews were announced via various national print and electronic media, including some that carried various provocative statements that bear absolutely no connection with the truth,” Amadi said.

On what the penalty was for distribution companies that failed to provide stable electricity despite collecting high fixed charges, the NERC boss stated that the commission had responded with regulations to enforce correct billing of unmetered customers.

He said NERC had also introduced the Credited Advance Payment for Metering Implementation policy to help protect electricity consumers.

“We will continue to enforce these regulations and interventions to improve quality supply before the preferred bidders take over the networks,” Amadi said.


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