Following an outcry over the decision to increase electricity tariffs in the country, the Nigerian Government says the implementation will commence in April.
The Chairman of the Nigeria Electricity Regulatory Commission (NERC), Professor James Momoh, stated this while addressing a news conference on Monday in Abuja, the nation’s capital.
On Saturday, Channels Television reported that NERC has approved the immediate review of electricity tariffs across the country.
A series of documents dated December 31, 2019 indicate an increase that ranges from 59.7 per cent to 77.6 per cent.
The increase affects all categories of electricity consumers, except those classified as residential (R1) whose N4 per kWh charge was left unchanged.
According to the documents jointly signed by Professor Momoh and the Commissioner for Legal, License, and Compliance, Dafe Akpeneye, the NERC said the reviewed tariffs were effective January 1, 2020.
The development affects the 11 Distribution Companies (DISCOs) in the country such as Abuja DISCO, Benin DISCO, Enugu DISCO, and Eko DISCO.
Others are Ibadan DISCO, Ikeja DISCO, Jos DISCO, Kaduna DISCO, Kano DISCO, Port Harcourt DISCO, and Yola DISCO.
This sparked widespread criticism of the government, apparently forcing the NERC to make further clarification on the controversy.
At Monday’s press conference, Professor Momoh explained that the review of the Multi-Year Tariff Order (MYTO) does not mean an immediate increase in tariff for electricity consumers.
He added that the commission would engage the public on the planned review in the next three months, before deciding on any implementation.
The NERC boss also said the electricity body would begin the regulation of estimated billing by electricity distribution companies who fail to provide meters for their customers.
In a bid to further explain the rationale behind its decision, the regulatory body issued a statement.
Read the statement below:
TARIFF REVIEW CLARIFICATION.
We make this statement to inform all our esteemed customers that we are not unmindful of news making the rounds that Electricity tariffs have been increased effective January 1 2020 as reported in some print and electronic media.
For clarity and improved understanding, we state the following points:
The Nigerian Electricity Supply Industry (NESI) is primarily regulated by the Nigeria Electricity Regulatory Commission (NERC).
NERC is empowered by the EPSR Act (EPSRA) to make Orders and Declarations in a manner promoting efficiency and sustainability within the NESI.
NERC is empowered by EPSRA to carry out minor reviews of the Multi-Year Tariff Order (MYTO) 2015 (the Electricity Tariff), twice a year.
An accurate electricity tariff assists greatly in ensuring efficient power supply delivery from the different stages of the electricity process, from Generation through Transmission to Distribution, as it assures stakeholders and participants of their costs recovery and return on investment. This makes the business viable.
NERC has just reviewed the MYTO 2015 and has published an Order on Tariffs and Minimum Remittance for Jan-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.
The Tariffs shall remain the same as they presently are (i.e. 2015 levels) until April 01 2020 when there will be a slight increment to cater to 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 01 2020 when the new adjusted tariffs shall begin to gradually reflect the dynamism of our macro-economy.
We sincerely hope that this statement substantially clarifies the accurate position and allays any fears and concerns, our esteemed customers may have.
We thank you for your continuing patronage.