A Review of the Nigerian Energy Industry

Tariff hike: NERC begins review of Discos’ proposed rates

* NERC Chairman, Dr. Sam Amadi.
* NERC Chairman, Dr. Sam Amadi.

*No decision on increase yet – Amadi

Oscarline Onwuemenyi

28 October 2015, Sweetcrude, Abuja – The Nigerian Electricity Regulatory Commission (NERC) on Tuesday announced that it has begun the review of new proposals submitted by electricity distribution companies (Discos) for increase in the retail rates they charge to consumers.

The retail rates, which covers a 10-year period, is being reviewed by NERC’s technical team to ascertain the authenticity of their details.

Chairman of NERC, Dr. Sam Amadi, who revealed this in Abuja, said that the commission will stay up in its decision to run an open and fair rate review, adding that there is no final decision over an increase or otherwise, until the end of the review.

He said, “It is at the end of the ongoing review exercise to be concluded in a few weeks’ time that the figures of increase or decrease would be clearer to anyone.”

“Most of the news items are in the realm of speculative journalism. The final figure is not clear to anyone as some of the distribution companies are still providing clarifications sought by the Commission’s technical team working on their applications.

“Some of them are also making corrections to their applications on the basis of those clarifications,” Amadi added.

He explained further that the process of reviewing the applications is painstaking and thorough, adding that, “We will not allow any frivolous claim by the operators to be passed to electricity consumers as tariff. That is a major reason we told them to consult with their customers after they submitted their applications to us.”

NERC also explained that within the review exercise, it is equally taking into consideration the outcome of the public consultations it conducted to get electricity consumers distribution companies debate on the proposal.

The Commission had in its recent decision to enthrone a democratic tariff review process in the country’s power sector, initiated a three-party electricity rates review regime where Discos are expected to draw up peculiar cost-reflective rates with which they can efficiently distribute electricity to consumers.

Under the arrangement, the Discos are also expected to run the rates through eligible consumers in their networks through open consultation processes that involve detailed justification of their proposals before the consumers.

The proposed rates were afterwards presented to the commission in an enlarged forum involving the parties some weeks back.

But clarifying the status of the process against the backdrop of speculations on the range of increase in electricity tariff, the Commission said that it was preposterous to speculate on the range of increase or the tendency in electricity tariff at this stage.

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