14 October 2015, Abuja – Abuja Electricity Distribution Company (AEDC) has sought the support of its esteemed customers to its 10-year tariff plan, which it unveiled recently.
AEDC had prepared the new rates following the request to the 11 Discos in the country by the Nigerian Electricity Regulatory Commission (NERC) to seek the support of their customers for a cost reflective tariff for the next 10 years starting from 2015.
Managing Director of AEDC, Mr Neil Croucher, who led officials of the company to seek the cooperation of its customers in the new rates at several stakeholders’ meetings across the covered States, disclosed at the weekend that the proposed tariff review was to among others, provide a cost reflective tariff to facilitate the attraction of private capital into the sector.
Croucher had stated that the current rates charged by the Disco to distribute electricity to its customers did not cover the cost of producing and distributing electricity in the country.
He disclosed that having put in as much as N2 billion since taking over the network from the government in 2013, the Disco would need to invest $200 million over the next five years in the network, hence its request for a review.
“We are appealing for a marginal increment in the tariff. And if you support us in this regard, it will help us to serve you better since private capital will be attracted to this new tariff regime,” said Croucher to the customers.
He stated that the sector needed massive injection of capital due to years of under investment under government ownership, adding that: “AEDC needs to inject $200 million over the next five years as part of its approved capital expenditure programme.”
“The tariff being put forward is a regulated tariff; there is no opportunity for us to make exorbitant profits out of it. Tariffs will actually come down over the course of the 10 years as the level of generation increases and losses come down,” he further explained.
According to him, customers will in the medium to long term be better off with lower tariff when the sector attains certain level of generation capacity.
Speaking more on the investments made by the Disco so far, Croucher said:
“The company had invested for the improvement of service delivery within its operating area since takeover in November, 2013, the sum of N2 billion which had been injected by the company with a view to improving its network assets and infrastructure.”
“Besides, we will install 500,000 meters, 100,000 per annum for a period of five years after we must have completed the pilot scheme of free meter installation totalling 35,000 for which Minna in Niger state and Life Camp in FCT have been selected as test areas. These projects are currently being rolled out.
“Electronic vending system is also in the offing where customers can pay their bills via the internet by logging on to our website, and POS terminals,” he added.
Notwithstanding AEDC’s pleas, its customers were however divided in their positions on the rate review, with some of them backing the marginal increase on the expectation it will bring about improvement in power supply, while others expressed reservations about the increase in tariff as they insisted on improvement before the review.
Croucher however requested that customers adopt the proposed rate review as a sacrifice to improve the stability of the network.
He stressed that even at the proposed tariff, customers would still pay less when compared with the cost incurred in self-generation of electricity.
Croucher in this regard reiterated that AEDC’s 10-year tariff plan ensures that the rate will actually fall in real terms over the years.
It will be recalled that the AEDC, mid-July, held a three-day consultative forum with electricity consumers across its franchise area, where it sensitized the public on its planned tariff review.
AEDC’s 10-year rate plan, alongside that of the other 10 Discos will however be subjected to regulatory review by the NERC before approval on their operationalisation will be granted.
- This Day