A Review of the Nigerian Energy Industry

No approval for electricity tariff increase — NERC

05 July 2015, Abuja – No electricity distribution company has received approval to increase tariffs payable by customers, the Nigerian Electricity Regulatory Commission has said.

Dr Amadi

NERC’s position is in reaction to complaints by consumers who say that some of the Discos have increased the tariffs, while others are making plans to raise the power consumption rates.

Responding to the fears expressed by the Nigerian Electricity Advocacy Network that some Discos were warming up to review tariffs from this month, the NERC Chairman, Dr. Sam Amadi, told our correspondent that the commission had not approved any tariff review for any electricity distribution company.

He stated that there were procedures to be followed before the Discos would receive approval from the commission with respect to tariff hike, and stressed that consumers should report any power firm that failed to follow laid down guidelines.

The Interim Steering Committee Chairman of NECAN, Mr. Tomi Akingbogun, had told our correspondent that some Discos claimed that they had received approval from NERC to fix tariffs after consulting with their customers.

He said that no Disco had invited the group, which was duly inaugurated by NERC, to any consultation on issues of tariff review.

“We have never been invited for any consultation by any Disco on issues pertaining to the review of tariff as mandated by the regulator,” Akingbogun said.

But speaking on the issue, Amadi stated that no Disco had reviewed the existing tariffs.

He said the power firms were aware of the rules and any one that contravened the guideline would be sanctioned.

Amadi said, “Nobody has reviewed tariffs and there’s no meeting on that. What we have rolled out is the guideline, which is for everybody. So, when the Discos call for meetings, they (NECAN) should attend the meeting. NERC advertised the guideline for public consultation and we must be there.

“Now, if consumers have objections against the consultation, then they should write to NERC. Our guideline says that if the Discos do not go through that process, they will not have their tariff applications considered. So what NECAN should be doing is to report to NERC any Disco that doesn’t carry out an adequate consultation and we will give them the guideline.

“In the guideline, we said you must give notice to your consumers and this must be on your website for three weeks, and you must include everything you want to apply to NERC for them to consider. They must give us a report detailing who and who attended and the issues discussed; after which we will now call for public review or comments on that report.”

Amadi maintained that no Disco had come to NERC to present an application demanding an increase in tariffs, adding that this was because none of them had successfully gone through the process stated earlier.

When our correspondent reminded the chairman of the announcement made in January by the commission that residential customers would start paying increased electricity bills beginning from July this year, he said the low rates paid in the past six months were due to a freeze put on the tariffs by the regulator.

Amadi said, “Tariff review is a general thing but that about residential consumers’ freeze is different. A freeze means the tariffs have been approved but are not to be operated yet. So, that’s a different thing.”

NERC had in January announced that the increase in electricity tariff would become effective for all categories of consumers in July this year.

This means that residential consumers, who constitute about 80 per cent of power users in the country, will pay new rates.

According to the commission, the bulk of the power consumers would have started paying higher tariffs from the first day of this year if not for the freezing of the increased rates for residential users for a six-month period.

Amadi had said, “You may recall that after a recently conducted special review, NERC approved a revised Multi Year Tariff Order 2.1, which came into effect on January 1, 2015.

“A major highlight of the MYTO 2.1 is a six-month freeze from January 1, 2015 on tariff increase for residential consumers, who constitute about 80 per cent of the electricity consumers, known in the industry as R2 customer class, in the country.”

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