A Review of the Nigerian Energy Industry

Electricity tariff cuts: FG makes U-turn, excludes residential customers

27 March 2015, Lagos – Some electricity consumers jubilating over recent tariff cuts announced by Nigerian Electricity Regulatory Commission, NERC, few weeks ago would be disappointed as the regulatory agency yesterday made a U-turn, saying the reduction did not apply to all categories of customers.

The Chairman of NERC, Dr Sam Amadi, who said this yesterday in Abuja, at a meeting with a delegation of the Electricity Consumer Association of Nigeria, ECAN, was emphatic that residential customers- R2 and R1 categories will see any reversal or reduction in tariff

Amadi said the tariff reduction is only applied to industrial, commercial and high end residential electricity customers (R3), which according to him would commence by this end of this month.

The ECAN leaderships were at the Commission to register their support for the steps taken by NERC to save the industrial sector through the reduction of tariff to these classes of electricity consumers.

Making the clarification, Amadi said, “We have always tried to listen to complaints from consumers and operators alike and we carry out tariff reviews when necessary. We are a responsive and accountable regulator,’’ Amadi said.

He explained that the reduction in tariff was a decision reached in line with the Commission’s Business Rules after consideration was given to protests from the Manufacturers Association of Nigeria, MAN, on the implication of January 1, 2015 increase in tariff on their businesses.

“Majority of the residential customers- R2 and R1 categories did not experience the January 1, 2015 increase in tariff. They will not also see any reversal or reduction in tariff as the industrial, commercial, and high end residential consumers whose tariff were increased.

“It was a reduction based on the impact collection loss had on the tariff,‘’ Amadi said, stressing that NERC took the action because it saw that there was merit in the argument put forward by MAN that the January 1, 2015 would impact their businesses,” he said.

In his remarks by the leader of the delegation and President of ECAN, Barrister Chijioke James, said that the group was at the Commission to endorse it for its action regarding the recent tariff reduction for some classes of electricity consumers.

“We have been very critical of NERC to see that consumers enjoy power supply, but it will be bad to see that a government agency has done something right and we fail to commend it openly,’’ Chijioke said.

He said that ECAN needs the support of agencies like NERC and Consumer Protection Council amongst others to enlighten consumers on the dangers of patronizing sellers of fake electrical equipment as well as the need to imbibe energy conservation practices. He said that consumers expect improvement in response rate to complaints from the service providers.

“ECAN use this opportunity to urge NERC to encourage electricity distribution companies to improve their response rate in resolving complaints from consumers nationwide,” he said.

– Vanguard
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