Wednesday, 1 April 2020

Electricity Companies Suspend Tarriff Increase Scheduled To Start Today

The Nigerian Electricity Regulatory Commission has suspended the proposed increase in electricity tariffs initially slated for Wednesday (today).

NERC had on January 4, in its December 2019 Minor Review of Multi Year Tariff Order 2015 and Minimum Remittance Order for the Year 2020 for the 11 Discos, said that consumers would start to pay more for electricity from April 1.

The power distribution companies had filed applications with the commission for a review of their respective end-user tariffs.

The regulator said on Tuesday that public hearings were held at different locations within the franchise areas of the Discos from February 25 and March 9 to consider the applications.

It said the wide metering gap in the Nigerian electricity supply industry, currently at about 60 per cent, “is a major impediment to both an immediate tariff review and revenue protection for Discos.”

According to NERC, customers of the 11 Discos are willing to pay appropriate rates for services rendered by the Discos but this willingness is conditioned on guaranteed hours of supply, quality of power and adequate metering.

“There shall be no increase in tariffs of end-use customers on April 1, 2020,” the commission said in a new order.

It said the December 2019 Minor Review of Multi-Year Tariff Order 2015 and Minimum Remittance Order for the Year 2020 would remain in force until June 30, 2020 when a new minor review order would be issued by the commission.

“The Federal Government of Nigeria shall provide tariff support during the transitional period to full revenue recovery ending on June 30, 2021 based on the under-recovery of the revenue requirement determined by the commission,” NERC said.

It, however, said the support would be within the context of funding that is available under the Power Sector Recovery Programme Financing Plan.

NERC directed all the Discos to submit a detailed plan for the attainment of full recovery of prudent costs and allowed return on capital by June 30, 2021.

It said the revenue recovery and financial sustainability plans should be submitted no later than April 21 2020.

“All future tariff reviews shall be on the basis of consultations between the Disco and customer clusters with firm commitments on rates and quality of service.

The Nigeria Labour Congress said on Tuesday said it would be insensitive for NERC to go ahead with the planned tariff hike.

The President NLC, Ayuba Wanna, noted that all the leaders of the NLC’s affiliate unions were unanimous in rejecting the planned increase in electricity tariff during their recent interactive session with NERC in Kano State.

He said the NLC “completely condemns and totally rejects any plan to inflict further pain on Nigerians at this very trying period of the novel coronavirus pandemic through increase in electricity tariff.”

“We wish to state that any increase in electricity tariff would only convey a deafening expression of insensitivity to the plight of the Nigerian people who are currently dealing with the social scare, income hemorrhage, economic squeeze and mortal dread of COVID-19,” he added

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