A Review of the Nigerian Energy Industry

Imminent electricity tariff Increase: TUC kicks


Oscarline Onwuemenyi

21 October 2015, Sweetcrude, Abuja – The Trade Union Congress of Nigeria, TUC, has vowed to resist reported plans by electricity distribution companies in the country to increase tariff by 49.4 percent.

The Nigerian Electricity Regulatory Commission, NERC, has said the new electricity tariffs proposed by the distribution companies for approval by the regulatory agency would be ready for implementation by the end of October.

The agency at its recent public consultation where the proposed new retail electricity rates were jointly reviewed by stakeholders, explained that it would first review the figures presented by the Discos, taking into consideration the diverse views of consumer groups, who were at the consultation before approving any rates.

Its chairman, Dr. Sam Amadi however noted that the new rates would be out and subsequently practical in the sector by the end of October.

Amadi further stated that from the end of October, the country’s electricity sector is expected to operate with new sets of tariff which is considered cost-reflective and capable of attracting investments in the sector.

“The new tariff is expected by the end of the month but we may skip our timeline to be able to do more thorough work. For example, we have to go to Kaduna and find out the numbers but essentially, our target is the end of the month,” Amadi said.

While reiterating the federal government’s reported stance on the tariff review, Amadi further said: “The policy for government is that we need a tariff that encourages investment. Ultimately, whatever they send to us, we are not going to give them a back of the envelop tariff. They have to satisfy all expected regulatory standards.

“The regulator does not allow people to recover more than what they are supposed to recover.”

He equally noted that the diverse views presented by consumers at the consultations would be considered in the final priming of the rates, adding that the commission would remain impartial in its approval of rates for use by the Discos.

“The views of consumers have been tremendous, if you recall, the issue of fixed charge, CAPMI and penalising Discos came from consultation.

“If you look back, you will see that we have always factored the views of consumers and this does not mean that whatever the consumers tell us becomes law but it helps us to do more research and find out what the problems are.

“Of course, public consultation has huge impacts on what we finally do but as always, it must be balanced and evidenced with good practice,” Amadi noted.

Speaking further, he explained that: “NERC can guarantee that the process we are undertaking is not just a ritual or hollow routine. This is a real search for a tariff regime that will enable investors recover their prudent costs and at the same time provide strong incentives for quality service for consumers.”

But, the Trade Union Congress, TUC, in a statement described the reported plans as “wrong and lacks human face” especially “In view of the present harsh economic realities in the land”.

According to TUC, a number of proposals have already been submitted to the Nigeria Electricity Regulatory Commission, NERC, pursuant to this objective.

The statement issued by TUC President, Bobboi Bala Kaigama and Secretary-Genera, Musa Lawal said:
“Why should the masses be at the receiving end of every wrong and retrogressive policy in the country? Why must they always pay for what the rich consume more of? What sense does it make for a man who earns less than N20, 000 per month to be made to pay over N8, 000 for electricity bill alone within the same month?

“Why should they pay so much for what they do not use regularly enough, with officers of the distribution companies rarely bothering to read the analogue metres? Why should these questionable issues that are spared no thought in other climes always take centre stage in Nigeria? Surely, Nigerians deserve a much better deal”.

TUC added, “Also, the Congress is informed that NERC is considering introducing measures that will facilitate reduction of the rate of the fixed charge on consumers. What has been happening all along is same with what is obtainable in the telecom sector. They either assign tones to subscribers or enrol them on plans that attract daily, weekly or monthly deductions.

“We say no to this idea. The N750 charge is fundamentally fraudulent and unjust and must be outrightly abolished. Anyone canvassing its sustenance or any increase in tariff does a grave disservice to the nation.”

The Congress added that, “Implementation of the planned increase would amount to an invitation to anarchy. It is totally oppressive, indefensible and retrogressive. Little wonder that the NERC has been foot-dragging on the issue of making prepaid meters readily available to consumers of electricity because of the excessive billing they have been imposing on all and sundry.

“There is no gainsaying the fact that the present billing system is crazy, and any increase in tariff at this time is bound to make it even crazier.

“The NERC and DISCO would do well to shun anything that would attract the wrath of the masses. Rather, Nigerians expect them to earnestly adopt genuinely consumer-friendly policies. The fact that power supply is relatively improved within the last few months does not mean that the myriad of challenges bedevilling the sector are over.”

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