A Review of the Nigerian Energy Industry

Electricity consumers’ll pay efficient tariff – NERC

29 June 2015, Abuja – The Chairman, Nigerian Electricity Regulatory Commission, Dr. Sam Amadi, has said that the commission will ensure that power customers pay only an efficient tariff.


Amadi stated this in a statement on Sunday as he gave insight into the removal of technical losses as a component of the tariff chargeable by electricity distribution companies, while receiving a three-man delegation of the European Union.

The commission had earlier in the year put the collection loss at zero value unless a distribution company could justify its collection.

Amadi said NERC had questioned the framework that led to huge collection losses being passed to electricity consumers and kicked against it because it was against international best practice and encouraged lack of performance on the part of the distribution companies.

He said, “We want a transparent, participatory and cost reflective tariff. We have outsourced the tariff-making process to the distribution companies and provided them with strict guidelines.

“The regulatory question is about what should be passed to the consumers. One school of thought is legalism and another is about what is right. So essentially, we ruled out collection losses and put them at zero.”

He added that electricity distribution companies must consult with the consumers before they could approach the commission for tariff review.

Amadi informed the visitors that as part of the commission’s drive to enhance electricity supply, it had been advocating embedded generation, which according to him, is already yielding results.

“The process of improving power supply lies with embedded generation. For now, the Ikeja Electricity Distribution Company is making progress on it and other distribution companies will soon follow suit,” he added.

The NERC boss explained that the industry was between 80 per cent and 85 per cent gas-dependant, but that gas pipeline vandalism remained a big challenge, adding that the East-West gas pipeline, when completed by 2016, would open the door for massive gas supply to the power plants.

“Non-commerciality of gas is a major constraint to gas supply as some of the generators are unable to sign gas contracts that should provide then guaranteed supply,” he added.

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