A Review of the Nigerian Energy Industry

‎Electricity tariff reduction hangs in the balance

Sam-Amadi, NERC
Sam-Amadi, NERC

*DISCOS yet to receive new details

Oscarline Onwuemenyi

25 March 2015, Sweetcrude, Abuja –
After more than one week since the Federal Government announced the slashing of electricity tariff by over 50 percent, distribution companies (DISCOS) in the country have insisted that they are yet to receive details of the new tariff from the Nigerian Electricity Regulatory Commission (NERC).

This situation, obviously, has thrown the DISCOS’ operations into confusion, and may derail implementation of the new policy.

It was also gathered that the commission was yet to publish the new tariff structure, which varies from DISCO to DISCO as at press time yesterday.

The Managing Director, Abuja Distribution Company (AEDC), Mr. Neil F. Croucher who spoke to reporters in Abuja yesterday lamented that, “Well, we are yet to see the details. It has not been published by NERC. But I understand that that 50 per cent was just an average and it varies from distribution company to distribution company.”

NERC Chairman, Dr. Sam Amadi had last week announced that collection of losses for all DISCOs has been set at zero level.

The statement from NERC noted that, “Therefore, on March 9, 2015, NERC issued a new order to the effect that henceforth collection loss, which is defined as the ‘amount billed but not collected’, will not be automatically passed on to consumers of electricity.

“Consequently, the collection loss for all DISCOs is set at zero. It is now the responsibility of DISCOs to convince the regulator of any exceptional circumstances for such loss to be passed to the consumers.”

According to Croucher, the AEDC is characterised by high commercial losses, which is as high as 50 percent and could mostly be remedied when every customer pays for electricity.

He explained that for the company to bring down the tariff, customers have to pay for electricity because non-payment of bills hold down the transformation process.

Croucher said energy theft and commercial losses are the basic setbacks in the electricity market since a study has revealed that the technical losses which the firm incurs is only about 14 per cent. He said due to the installation of new transformers, the AEDC has reduced the losses.

Croucher said, “In our case just about 50 per cent losses, we still have low level of generation. So, the distribution companies have the challenges of high losses in our business . But what we do to bring losses down , is to help bring the price down everyone needs to pay for electricity .

NERC last week issued an order that collection losses should not to be passed on to electricity consumers.

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